MTB Legislation Seen as Potential Vehicle for GSP Renewal
Trade groups are eyeing the miscellaneous tariff bill (MTB) set to be considered in November as a possible vehicle for renewal of the Generalized System of Preferences program, industry executives said in recent interviews. “We’re thinking that those two will be packaged together to move, and so we’re hoping that’ll give additional impetus” to Congress for renewing GSP before the program expires Dec. 31, said American Apparel and Footwear Association (AAFA) Senior Vice President for Supply Chain Nate Herman. AAFA and other stakeholders are feeling an increased urgency to push for renewal after Congress let GSP benefits lapse between 2013 and 2015 before passing trade preferences legislation to re-enact the program (see 1605160032), Herman said.
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The American Manufacturing Competitiveness Act (AMCA) of 2016 (here) includes a “sense of Congress” that lawmakers will consider an MTB no later than 90 days after the International Trade Commission issues a final report recommending duty suspensions and reductions pursuant to the MTB process. The ITC sent its preliminary report on MTB petitions to Congress on June 9, and will deliver its final report by Aug. 8 (see 1706120002). That means that under the AMCA timeline and depending on when the ITC actually sends its final report, Congress should consider MTB legislation Nov. 6 or sooner.
“GSP rarely has moved, if ever, as a standalone item,” Herman said. “It always has been packaged as something else, because the issue is it isn’t a big enough program alone to move in regular order.” MTB and NAFTA implementation bills are two of the few trade bills foreseeably able to move in the near future, but it could be well into 2018 before Congress considers NAFTA, assuming the Trump administration continues to follow the Trade Promotion Authority timeline, Herman said. That’s part of what makes MTB legislation a prime candidate to carry forward GSP renewal, he said.
While it would be preferable for GSP renewal to move by itself, “there probably aren’t going to be a whole lot of trade votes happening this year, so if it makes sense to tie GSP to MTB, I think they’re going to look to do that,” National Retail Federation Vice President for Supply Chain and Customs Policy Jon Gold said in an interview. The chair and ranking member of the House Ways and Means and Senate Finance committees usually introduce GSP renewal legislation, Herman said. But for now, lobbyists are just trying to put GSP on Republican and Democrat senators’ and House lawmakers’ radars, both inside and outside the trade committees of jurisdiction, Gold said.
GSP advocates are hoping to hear that renewal is still an administration priority from U.S. Trade Representative Robert Lighthizer during testimony June 21 before Senate Finance (see 1706140039) and June 22 before House Ways and Means (see 1706160009), Gold said. The Office of the U.S. Trade Representative, Senate Finance and House Ways and Means didn’t comment.
Gold and Herman said if GSP is bundled with this fall’s MTB, stakeholders will push for inclusion of additional legislation introduced in May by Rep. Adrian Smith, R-Neb., that would qualify footwear classified in more than 20 Harmonized Tariff Schedule subheadings in Chapter 64 as eligible for GSP treatment for the first time in the four-decade-old program’s history (see 1705260035). “That’s what we were able to do back in 2015, with the GSP travel goods bill, the GSP Update [for Production Diversification and Trade Enhancement] Act, and so that we should be able to do again in the footwear bill,” Herman said. Congress authorized the inclusion of travel goods, also referred to as outdoor goods, in GSP as part of trade preferences legislation signed by President Barack Obama in June 2015 (see 1504230001). Herman said he expects Smith, and Reps. George Holding, R-N.C., and Tom Reed, R-N.Y., who have also introduced and co-sponsored, respectively, the Trade Preferences Extension Act of 2015 in the House (here), to be among the champions of this round of GSP renewal.
The Coalition for GSP wrote in a recent blog post (here) that companies are “already in a very tough spot” as 2018 sourcing and pricing decisions must be made now or very soon, but firms don’t know whether imports will remain duty-free as GSP hangs in the balance. As companies eagerly await an indication from Congress whether renewal will happen, some are increasing their pricing under the assumption it won’t get renewed, while “some are just betting that it will get renewed,” Herman said. “Everybody’s saying the right things” in Congress as far as GSP renewal, Herman said. “There hasn’t been any opposition that we have seen so far. But it is a trade issue, and an environment that is not particularly favorable to the trade right now, and we’ve had an issue with GSP expiring before, and so that’s where our concerns come in.”