ICAR News

Tools of Trade: The Use of U.S. Generalized System of Preferences to Promote Labor Rights for All

The U.S. Generalized System of Preferences (GSP), created under the Trade Act of 1974, provides leverage for the U.S. government to promote greater economic growth, political reform, and respect for labor rights in its 120 beneficiary developing countries. The program conditionally provides duty-free access for more than 3,500 goods from beneficiary countries to the United States.

Eligibility for the GSP hinges on a country’s compliance with a number of U.S. priority policies. Specifically, with respect to labor rights, the recipient country must: (1) have taken or is taking steps to afford internationally recognized worker rights to workers in the country, and (2) implement its commitments to eliminate the worst forms of child labor.

While the GSP has led to some positive changes in labor rights in certain countries, overall, there has been weak enforcement of the labor rights eligibility criteria. As a result, countries with some of the worst labor rights records in the world have been provided duty-free access to U.S. markets. This undermines the effectiveness and credibility of the program.

This paper provides an overview of the GSP program and a related regional trade preference program for sub-Saharan African countries, identifies gaps in implementation, and proposes recommendations for Congress and the administration to enhance the legal structure and enforcement of the GSP with a view to improving human rights, including labor rights, globally.

The full report can be downloaded here.

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