A major labor union is calling on lawmakers to reform the Generalized System of Preferences as part of any renewal of the currently lapsed program. Supporters are trying to generate momentum in Congress to reinstate GSP, likely prompting the union’s response, but there doesn’t appear to be much at the moment.
GSP, which provides duty-free treatment for imports of thousands of products from more than 100 developing nations, expired Dec. 31, 2020, meaning GSP-eligible goods have been subject to U.S. tariffs since Jan. 1, 2021. Congress must act for the program to be reauthorized, but lawmakers have failed to do so despite traditional bipartisan support for GSP due to disagreements over whether and how much it should be reformed.
Earlier this year dozens of GSP beneficiary countries urged the leaders of the Senate Finance and House Ways and Means committees to renew the program in light of its benefits to both their own economies and U.S. producers. In May Senate Majority Leader Chuck Schumer, D-N.Y., announced plans to develop a legislative package aimed at further boosting U.S. competitiveness with China that he said could include a renewal of GSP and a number of other trade-related provisions that lawmakers approved before they were ultimately dropped from the CHIPS and Science bill signed into law in 2022. In July a bipartisan group of lawmakers urged the majority and minority leaders of the Ways and Means Committee to reauthorize GSP because its duty breaks could facilitate supply chain shifts out of China and into GSP beneficiary countries.
In a likely response to these efforts, the United Steelworkers union sent a letter to House members Aug. 31 asserting that any effort to reauthorize GSP should include “significant reforms to better defend American workers, reduce international labor and environmental abuses, and ensure that economically developing countries are not used to shadow send products from the People’s Republic of China into the U.S. market.” USW said that if improvements in the following areas (which are among the very issues that have been most problematic in congressional discussions) are not made the union “will be forced to oppose renewal of the program.”
Rules of origin. Previous authorizations of GSP allowed 65 percent of the appraised value of eligible products to come from non-beneficiary countries and still qualify for duty-free status, a “massive loophole that allows foreign producers to potentially bring in Chinese or Russian content duty-free.” USW wants at least 60 percent of a product’s value to be required to come from beneficiary countries.
Sensitive sectors. Noting that GSP’s import-sensitive list has not been significantly updated to reflect the U.S. manufacturing sectors negatively impacted by adverse trade, USW wants Congress to add pneumatic radial tires to that list.
Labor standards. USW expressed support for a bill introduced by Rep. Earl Blumenauer that would strengthen GSP labor standards; e.g., by requiring beneficiaries to take effective action against the use of threats and violence against trade unionists and updating GSP language to better reflect USMCA updates on workers’ fundamental labor rights.
TAA. Citing a Congressional Research Service report that leading GSP imports included handbags and jewelry made of gold or other precious metals, USW called on Congress to renew Trade Adjustment Assistance as part of any GSP reauthorization, arguing that it is “unconscionable that Congress would lower tariffs on high-end, luxury goods, like handbags and gold chains, and provide nothing to tens of thousands of U.S. workers who lose their jobs due to insidious trade practices every year.”
For more information on GSP, please contact David Olave at (202) 730-4960 or via email.
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