Details of Trade Bill Passed by Congress on GSP and ATPA/ATPDEA Extensions, Vietnam PNTR, AGOA Apparel, Haiti Benefits, Chapter 99, Etc. (Part I)

This measure is expected to be signed on December 20, 2006.

This is Part I of a multi-part series of summaries of H.R. 6111 as passed by Congress and highlights the bill's provisions extending and revising the Generalized System of Preferences (GSP) and the Andean Trade Preference Act (ATPA)/Andean Trade Promotion and Drug Eradication Act (ATPDEA). See future issues of ITT for additional summaries.

GSP Program Extended through December 31, 2008

H.R. 6111 amends 19 USC 2465 to extend the standard GSP program (i.e., A, A*, and A) for non-African Growth and Opportunity Act (AGOA) beneficiary countries for an additional two years, through December 31, 2008.

(Non-AGOA GSP beneficiary countries include India, Bangladesh, Brazil, Philippines, Sri Lanka, and numerous others.)

GSP Competitive Need Limit Waivers Tightened

H.R. 6111 also amends 19 USC 2463(d)(4)(B) regarding certain GSP competitive need limit waivers (CNLs) in order to better focus the program's benefits on lesser developed countries. The amendment gives the President discretion to end waivers on products that constitute 150% of the CNL or 75% of U.S. imports of that product from that country. (Administration sources have noted that the changes resulting from this amendment would affect specific country/tariff number combinations.)

Specifically, H.R. 6111 states that not later than July 1 of each year, the President should revoke any CNL that has then been in effect for an article for 5 years or more if the beneficiary developing country has exported to the U.S. (directly or indirectly) during the preceding calendar year a quantity of the article:

having an appraised value in excess of 1.5 times the applicable amount of the value CNL (which was $125 million in 2006 and is to be increased $5 million each year) for that calendar year; or

exceeding 75% of the appraised value of the total imports of that article into the U.S. during that calendar year.

ATPA/ATPDEA Extended for Six Months

H.R. 6111 amends the ATPA/ATPDEA by extending the termination date to June 30, 2007 (from December 31, 2006). (Currently, Bolivia, Colombia, Ecuador, and Peru are ATPA/ATPDEA beneficiary countries.)

In addition, H.R. 6111 provides a further conditional six-month extension if the U.S. Congress and an ATPA/ATPDEA country's legislature both approve a free trade agreement (FTA) between the parties by June 30, 2007.¹

(The U.S. has signed, but not yet implemented, FTAs with Colombia and Peru. See ITT's Online Archives or 11/28/06 news, 06112805, for BP summary of the signing of the U.S. and Colombia signing the FTA. See ITT's Online Archives or 04/14/06 news, 06041405, for BP summary of the signing of the U.S.-Peru FTA.)

ATPDEA Technical Amendments

H.R. 6111 also contains two technical amendments to section 204(b)(3)(B) of the Andean Trade Preference Act (19 USC 3203(b)(3)(B)), which would add the phrase "subject to section 208" to clauses (iii)(II) and (v)(II)².

¹H.R. 6111 states that duty-free treatment and other preferential treatment under ATPA/ATPDEA would remain in effect with respect to a beneficiary country, during the period of July 1, 2007 through December 31, 2007 only if (on or before June 30, 2007): (1) an implementing bill with respect to a trade agreement with that country has been enacted into law pursuant to Trade Promotion Authority; and (2) the President determines that the legislature of that country has approved such trade agreement.

²Section 208 of the ATPA is the section which provides for the effective date and termination date of the ATPA.

(See ITT's Online Archives or 12/11/06 news, 06121105, for previous BP summary announcing that H.R. 6111 was passed by Congress.)

H.R. 6111 available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h6111enr.txt.pdf.