Congress Passes GSP and ATPA/ATPDEA Extensions, DR "2 for 1" Apparel Benefit, AGOA "Abundant Supply" Repeal, Etc.
On October 3, 2008, the House of Representatives agreed to the Senate's version of H.R. 7222, a bill to extend the Andean trade preferences and Generalized System of Preferences programs beyond their current expiration dates, and make various changes regarding certain African and Dominican Republic textiles.
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As both the House and Senate have passed the same version of H.R. 7222, the next step is for the bill to go to the President, who is expected to sign it into law.
Highlights of H.R. 7222
As passed by both the House and Senate, H.R. 7222 includes the following provisions:
One year extension of GSP. The GSP program (A, A*, A), which provides duty-free treatment for certain products from beneficiary countries other than those listed as African Growth and Opportunity Act beneficiary countries, would be renewed1 for an additional year, through December 31, 2009.
(For AGOA beneficiary countries, both the GSP program (i.e., A, A*, A) and the AGOA-GSP program (i.e., D) remain in effect through September 30, 2015.)
Six months to one year extension of ATPA/ATPDEA. The Andean Trade Preferences Act/Andean Trade Promotion and Drug Eradication Act (ATPA/ATPDEA) would be renewed1 for:
One year for Colombia and Peru;
Six months for Ecuador, plus an additional six months unless the Administration determines that Ecuador does not satisfy ATPA criteria; and
Six months for Bolivia, plus an additional six months only if the Administration determines that Bolivia satisfies ATPA criteria.
H.R. 7222 also extends the ATPDEA regional fabric tariff preference level and the ATPDEA brassiere provision.
(The ATPA/ATPDEA provides duty-free treatment to certain exports from Colombia, Peru, Ecuador and Bolivia; however, President Bush has recently proposed to suspend ATPA/ATPDEA benefits for Bolivia. (See ITT's Online Archives or 09/29/08 news, 08092915, for BP summary.)
Dominican Republic 2-for-1 apparel program. Under this Earned Income Allowance Program, when producers purchase a certain quantity of qualifying U.S. fabric (2 square meter equivalents (SMEs)) for certain apparel production2 in the Dominican Republic, they would receive a credit (equivalent to 1 SME). This credit could then be used to ship a proportional quantity of eligible apparel (woven cotton (but not of denim) trousers, bib and brace overalls, breeches and shorts, skirts and divided skirts, and pants) from the Dominican Republic to the U.S. duty-free regardless of the origin of the fabric from which the apparel product is made.
Repeal AGOA "abundant supply" provisions.The African Growth and Opportunity Act would be amended to repeal the "abundant supply" provisions to ensure African countries can use third country fabrics in apparel qualifying for duty free treatment.
(The existing "abundant supply" provision states that if any fabric is available in "abundant supply" in Africa and is not wholly consumed in the production of apparel under AGOA over a certain period (2 years), least developed countries (LDCs) will lose the third country fabric privileges with respect to any apparel produced from that fabric.)
Third country fabric AGOA benefits for Mauritius. Mauritius would be designated an AGOA lesser developed AGOA beneficiary country, and its eligibility to use the AGOA "third country fabric" provisions would be reinstated. Mauritius' designation lapsed in September 2005.
Technical corrections, funding, etc. provisions. H.R. would also make certain technical corrections to AGOA and the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008. H.R. 7222 also includes certain reporting requirements.
H.R. 7222 also includes funding provisions, including a shift in corporate estimated taxes, extended Customs user fees, and a repeal of the Customs' user fee prepayment provisions in the 2008 Farm Bill.
1Without an extension, the expiration date would be December 31, 2008.
2 This apparel should be 'similar' to the apparel (e.g. trousers, etc.) that would make use of the credits.
(See ITT's Online Archives or 10/03/08 news, 08100307, for BP summary on the Senate's October 2, 2008 passage of its version of H.R. 7222.
See ITT's Online Archives or 09/30/08 news, 08093000, for BP summary of the House's September 29, 2008 passage of its own version of H.R. 7222.
Senate Finance Committee press release on H.R. 7222 (dated 10/03/08) available at
http://finance.senate.gov/press/Bpress/2008press/prb100308.pdf.
H.R. 7222, as passed by the House and Senate, available athttp://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h7222enr.txt.pdf.