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Trade Preference Program


A free preference program is a unilateral act of the U.S. granting some specific preferred treatment to the products of beneficiary nation(s) provided they meet the rules of that particular preference program. Preference programs must be distinguished from free trade agreements which are reciprocal agreements negotiated among nations.


The U.S. Generalized System of Preferences ("GSP"), a program designed to promote economic growth in the developing world, provides preferential duty-free entry for more than 4,650 products from 144 designated beneficiary countries and territories. The GSP program was instituted on Jan. 1, 1976, and authorized under the Trade Act of 1974 for a 10-year period. It has been renewed periodically since then, most recently in 2002, when President George Bush signed legislation that reauthorized the GSP program through 2006. Textile and apparel articles are not eligible for GSP.

The trade programs known collectively as the Caribbean Basin Initiative ("CBI") was initially launched in 1983 through the Caribbean Basin Economic Recovery Act ("CBERA"), and substantially expanded in 2000 through the U.S.-Caribbean Basin Trade Partnership Act ("CBTPA"). CBTPA entered into force on October 1, 2000 and continues in effect until September 30, 2008 or the date, if sooner, on which the yet to be negotiated Free Trade Agreement of the Americas ("FTAA") or another free trade agreement as described in legislation enters into force between the United States and a CBTPA beneficiary country.

The Trade and Development Act of 2000 which created the CBTPA, also created the Africa Growth and Opportunity Act ("AGOA"). AGOA entered into effect October 1, 2000 and is currently scheduled to expire September 30, 2015.

The Andean Trade Preference Act was enacted in 1991 to combat drug production and trafficking in the Andean countries: Bolivia, Colombia, Ecuador and Peru. ATPA was expanded under the Trade Act of 2002, and is now called the Andean Trade Promotion and Drug Eradication Act. It provides duty-free access to U.S. markets for approximately 5,600 products.

More Information

On March 7, 2008 the Government Accounting Office ("GAO") released International Trade: U.S. Trade Preference Programs Provide Important Benefits, but a More Integrated Approach Would Better Ensure Programs Meet Shared Goals (GAO-08-443), including this table:
Table 1: U.S. Trade Preference Programs
ProgramEnactment dateNumber of eligible countries, 2007
GSP January 1975
•Several amendments
CBI \a\
•Caribbean Basin Economic Recovery Act (CBERA)
•Caribbean Basin Economic Recovery Expansion Act
•Caribbean Basin Trade Partnership Act (CBTPA)
•Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) Act

•August 1983
•Amended August 1990
•May 2000
•December 2006


ATPA \b\
•Andean Trade Promotion and Drug Eradication Act (ATPDEA)
December 1991
•Amended August 2002

AGOA \c\ May 2000
•Several amendments
Source: GAO

\a\ CBI is a collection of several trade preference programs. It was initially established in 1983 through CBERA, Pub. L. No. 98-67, Title II, 97 Stat. 384 (1983) and expanded in 1990 by the Caribbean Basin Economic Recovery Expansion Act, Pub. L. No. 101-382, Title II, 104 Stat. 655. It was substantially expanded in 2000 by CBTPA, Pub. L. No. 106-200, Title II, 114 Stat. 275 (2000). The most recent change to CBI was made by the HOPE Act of 2006, Pub. L. No. 109-432, Div. D., Title V, 120 Stat. 3181 (2006). In this report, we at times describe HOPE separately from CBI to illustrate the key characteristics of HOPE.

\b\ Pub. L. No. 102-182, Title II, 105 Stat. 1236, as amended. ATPA was substantially expanded in 2002 by ATPDEA, Pub. L. No. 107-210, Div. C. Title XXXI, 116 Stat 1023 (2002) and amended in 2006 by the Andean Trade Preferences Extension Act, Pub. L. No. 109-432, Div. D, Title VII, 120 Stat. 3194 (2006).

\c\ Pub. L. No. 106-200, Title I, 114 Stat. 252 (2000), as amended.

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This page last updated 5/22/2014.