Impact Of Upcoming Expiration Of ATPDEA And Possible Delay Of Extension Of The GSP

Thanks to our friends at AFIF, here is a summary of the upcoming expiration of the ATPDEA and the possible delay of extension of the GSP.  There has been some information on this but we want to make sure everyone is fully informed.  The Association of Floral Importers of Florida (AFIF) is providing the following information:

• The ATPDEA covered all floral products from Colombia, Peru and Ecuador.  Colombia and Peru implemented Free Trade Agreements so this leaves Ecuador alone under the ATPDEA and it expires on July 31, 2013.   Part of the agreement under the ATPDEA is for the covered countries to negotiate with the US long term trade agreements.  Ecuador has not done this so it is unlikely that it will be renewed.
• GSP is a trade preference agreement that also covers floral products from Ecuador but has had the umbrella of the ATPDEA since 1991 so it hasn’t been important to know what products are covered under GSP until now.  GSP is set to expire on July 31, 2013.  Roses (all types) are not covered under GSP. 
• Ecuador asked to have roses added to the GSP but President Obama deferred a decision on allowing them to be added.  So, right now even if GSP is renewed roses (all types) are currently not included.
• Duty on Roses is 6.8% of the farm invoice value/border value paid by the importer of record.(Charged by Customs and Border Protection with the importing entry)
• Duty on other Ecuadorian flowers are 6.4% except mini carnations which are 3.2% and are based on the invoice value/border value paid by the importer of record.(Charged by Customs and Border Protection with the importing entry)
• Congress (both the House and the Senate) have to pass the extension of the GSP.  Congress has a lot of issues that they are trying to cover before they leave on summer break on August 2^nd.  They will not be back in Washington until September 9^th.  If they do not bring it up for renewal before July 31^st GSP will expire and duties will be charged.
• If Congress lets the GSP expire and they bring it to the floor after the expiration date of July 31^st, there’s no guarantee that Congress will have the preferences be retroactive so there’s no guarantee that the duties will be returned. 
• So, importer of records need to prepare for duties to be charged to them as of August 1^st, 2013 on all floral products from Ecuador.
• The duties are now an additional cost of purchasing the products.  The cost of the flowers includes:  farm invoice, cargo agent cost, airline cost, clearance cost and now duty. 
• Many years ago the Miami Importers went to FOB pricing because the wholesalers said that they wanted a total price when quoted.