House & Senate Bills Introduced on GSP/ATPDEA, Sleeping Bags

The Senate bill was introduced by Senator Sessions on March 2, 2011 and the House bill was introduced by Representative Aderholt on March 3, 2011.

(According to sources in the trade, the Administration, and Congress, renewal of the Generalized System of Preferences program is more uncertain now than at any time in the last few decades. Experts are stating that the two largest impediments to GSP extension legislation are the new House CUTGO funding requirements and the likelihood of holds (e.g. for sleeping bags) in the Senate. (See ITT’s Online Archives or 03/01/11 news, 11030130, for BP summary.)

Both GSP and ATPDEA Have Expired

GSP for most beneficiary countries (A, A+, and A*), i.e., other than those listed as African Growth and Opportunity Act (AGOA) beneficiary countries, expired on December 31, 2010.

ATPA/ATPDEA for Colombia and Ecuador expired on February 12, 2011. (Peru’s ATPA/ATPDEA eligibility expired on December 31, 201; however, Peru has a free trade agreement with the U.S.)

Would Renew GSP to June 30, 2012 and Allow Retroactive Refunds

The Free and Fair Trade Act would renew the GSP program through June 30, 2012 effective for goods entered² on or after the 15th day after the date of enactment.

Retroactive reinstatement. Goods (other than certain excluded sleeping bags, see below), entered² on or after January 1, 2011, but before the effective date, that would have qualified for GSP duty-free treatment had the entry been made before GSP expired, would be eligible to be liquidated or reliquidated as if the entry had been made on or after the bill’s effective date (see below for refund procedures).

Would Exclude Certain Sleeping Bags from GSP-Eligibility

Effective for goods entered or withdrawn from warehouse for consumption on/after 15 days after the date of enactment, the list of articles that may not be designated as GSP-eligible articles would be amended to include “non-down” sleeping bags in HTS 9404.30.80³.

(Note -- another Senate bill (S. 308), introduced by Senators Casey (D) and Brown (R) on February 8, 2011, would except certain high value sleeping bags and sleeping bag kits from such an exclusion. See ITT’s Online Archives or 02/14/11 news, 11021426, for BP summary of S. 308.)

Sleeping bags have blocked extension. For the past few years, Senator Sessions (R) has placed a hold on legislation to extend GSP due to his opposition to GSP duty-free benefits for “non-down” sleeping bags. In the 111th Congress, Senator Sessions introduced legislation (S. 3823) to remove these sleeping bags from GSP-eligibility.

(See ITT’s Online Archives or 12/20/10 news, 10122035, for BP summary of Senator Sessions’ opposition to GSP benefits for these sleeping bags.)

Opposition to carve-out expected. Senate sources have indicated that there has been opposition to using a “legislative carve-out” to exclude a product from receiving GSP benefits. Experts have noted that the trade leadership in Congress is also opposed to this approach, and that such a provision could make these bills ‘non-starters.’

(In October 2010, the U.S. Trade Representative accepted for review in the 2010 GSP Annual Review, a petition to withdraw from GSP eligibility certain types of “non-down” sleeping bags (HTS 9404.30.80). The ITC recently released the public version of its report on the likely impact of eliminating duty-free GSP treatment for “non-down” sleeping bags from all countries. Although this report contains industry and market data, it does not include the ITC’s findings regarding probable economic effect. (See ITT’s Online Archives or 03/03/11 news, 11030315, for BP summary of the ITC’s report.) According to the USTR, any modifications to the list of articles eligible for duty-free treatment under the GSP resulting from the 2010 Annual Review would be announced on or about June 30, 2011, and would take effect on the effective date announced.

In July 2010, the USTR denied a petition to remove GSP eligibility for the same type of sleeping bags (HTS 9404.30.80) as part of its 2009 GSP Annual Review. See ITT’s Online Archives or 07/02/10 and 04/21/10 news, 10070221 and 10042131, for BP summaries on the results of the 2009 GSP Annual Review and the ITC’s associated report.

Trade sources have previously noted that while there is opposition to a legislative carve-out, there may be less concern over any USTR action producing a similar result.)

Would Renew ATPDEA to June 30, 2012 and Allow Retroactive Refunds

The Free and Fair Trade Act would renew ATPA/ATPDEA through June 30, 2012 for Colombia and Ecuador effective for goods entered² on or after the 15th day after the date of enactment.

(Note that Representative Camp (R), Chairman of the House Ways and Means Committee, introduced a bill (H.R. 622) to renew ATPA/ATPDEA through June 30, 2011. On February 17, 2011, Senator McCain (R) introduced S. 380, a bill to renew ATPDEA through November 30, 2012. (See ITT’s Online Archives or 02/14/11 news, 11021426 and 02/22/11 news, 11022212, for BP summaries.)

Retroactive reinstatement. Goods entered² on or after February 13, 2011, but before the effective date, that would have qualified for ATPA/ATPDEA duty-free or other preferential treatment had the entry been made before ATPA/ATPDEA expired, would be eligible to be liquidated or reliquidated as if the entry had been made after the bill’s effective date (see below for refund procedures).

TPL, brassiere, emergency tariff action authority would also be renewed. The Free and Fair Trade Act also includes a one year extension of the ATPDEA regional fabric tariff preference level (TPL) and the ATPDEA brassiere provision. The bill would also extend through June 30, 2012 (from February 12, 2011) authority for the President to take certain bilateral emergency tariff actions with respect to ATPDEA apparel. (Note that although the regional fabric TPL and brassiere provision would be extended until September 30, 2012, they would expire on June 30, 2012 if ATPA/ATPDEA is not further extended beforehand.)

Procedures for Obtaining Retroactive Refunds for GSP and ATPDEA Entries

A request for liquidation or reliquidation would be made with respect to an entry only if a request is filed with U.S. Customs and Border Protection not later than 180 days after the date of the enactment. The request must contain sufficient information to enable CBP to locate or reconstruct (if it cannot be located) the entry or withdrawal.

Any amounts owed by the U.S. pursuant to the liquidation or reliquidation of an eligible entry would be paid, without interest, not later than 90 days after the date of the liquidation or reliquidation.

Funding to be Provided by the Rescission of Certain Appropriated Funds

Funding for the Free and Fair Trade Act would be provided by the rescission of certain appropriated discretionary unexpired funds.

¹According to Representative Aderholt’s office, H.R. 913 and S. 433 are identical.

²includes a withdrawal from warehouse for consumption.

³HTS 9404.30.80 covers sleeping bags, not containing 20% or more by weight of feathers and/or down, which are referred to as non-down sleeping bags.

(See ITT’s Online Archives or 02/10/11 and 02/11/11 news, 11021116, for BP summary on the failed attempt on February 10, 2011 to extend ATPDEA.

ITT’s Online Archives or 01/04/11 and 12/27/10 news, 11010418 and 10122711, for BP summary of CBP’s instructions on GSP’s expiration.)

Representative Aderholt’s press release available here

Senator Sessions’ press release available here

S. 433 available here