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Lawmakers Call for Extension of GSP Before Dec. 31 Expiration

Thursday, November 02, 2017
Sandler, Travis & Rosenberg Trade Report

Forty members of the House of Representatives have called for Congress to approve a long-term extension of the Generalized System of Preferences before it expires Dec. 31. After the program’s last expiration it remained unauthorized for two years, costing importers millions of dollars, and there has been some concern that a similar lapse could follow the upcoming expiration.

GSP provides duty-free treatment for more than 3,500 products imported from 120 beneficiary developing countries and an additional 1,500 products imported from least-developed BDCs. The combined lists include most dutiable manufactured and semi-manufactured products as well as certain agricultural, fishery, and primary industrial products that are not otherwise duty-free.

In an Oct. 27 letter to House Ways and Means Chairman Kevin Brady, R-Texas, and Ranking Member Richard Neal, D-Mass., the lawmakers said GSP helps U.S. manufacturers and workers “compete in a tough global economy,” noting that in 2016 GSP eliminated about $730 million in tariffs and about two-thirds of GSP imports were raw materials, components, and machinery. GSP benefits BDCs by providing incentives to source production in those countries, the letter said, but also benefits the U.S. by requiring compliance with eligibility criteria such as improving labor practices, protecting intellectual property rights, treating U.S. investors fairly, and opening markets to U.S. goods and services. The program also helps domestic families by lowering costs for consumer goods and food products.

Uncertainty about whether GSP will be renewed hinders these benefits, the letter said, and could cause U.S. companies to lay off workers, lower wages and benefits, and reduce investment. As a result, the lawmakers called for Congress to pass a long-term GSP reauthorization “as quickly as possible.”

Sandler, Travis & Rosenberg can assist companies interested in extending GSP. For more information, please contact Nicole Bivens Collinson at (202) 730-4956 or David Olave at (202) 730-4960.

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