Background

Prospects for reinstatement of the Generalized System of Preferences and the miscellaneous trade bill, which together lower or suspend duties on thousands of imported goods, appear to be on the upswing amid speculation that they could be included in legislation Congress is working to approve.

Some leaders in Congress have mentioned GSP and MTB in recent public statements. During a Dec. 2 hearing on Chinese trade practices, House Ways and Means Trade Subcommittee Chair Earl Blumenauer said there is a need to make some changes to both programs and that such changes “must be included in any reauthorization.” Subcommittee Ranking Member Vern Buchanan added that renewal of GSP and MTB are “urgent priorities that will help our companies compete more effectively against … China.”

A day earlier, the U.S. Chamber of Commerce put GSP and MTB at the top of its list of trade priorities in a letter to the chair and ranking members of the Senate Finance and House Ways and Means committees. Separately, a group of more than 200 companies asked the same four leaders to take action on the MTB.

In the meantime, there have been initial discussions on advancing legislation that could incorporate GSP and MTB. The U.S. Innovation and Competitiveness Act approved several months ago by the Senate includes renewal of both programs, with some modifications to GSP in terms of country eligibility requirements. The House has not approved a GSP or MTB bill, but almost all the Democratic members of the Ways and Means Trade Subcommittee signed onto legislation that would make deeper reforms to the two programs than proposed by the Senate. According to statements made by Rep. Blumenauer to the press Dec. 2, leaders in both the House and Senate have started to discuss a process to reconcile these provisions.

The goods news, then, is that this process is forcing the different sides to begin negotiations and try to find a path forward for GSP and MTB. Both Democrats and Republicans seem to agree that the programs should continue, but there is concern from the private sector, Republicans, and even some Democrats that the proposed reforms advocated by Rep. Blumenauer would unreasonably limit them. Additional discussions will be necessary, but even if there is some agreement the ultimate fate of the MTB and GSP could be delayed into early 2022 or further if they are tied to the USICA or similar legislation.

For more information on GSP or MTB, please contact David Olave at (202) 730-4960 or via email.

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