House Passes GSP/MPF Increase Bill, Now Goes to Senate

Senate Expected to Add TAA Amendment and Pass Bill

House Ways and Means Committee Ranking Member Levin (D) has stated that the Senate appears likely to amend this bill by adding a provision to renew Trade Adjustment Assistance. It is not known if other amendments will be offered or added by the Senate. Passage of the bill by the Senate is also expected. If the Senate amends H.R. 2832, it would have to go back to the House¹.

Action on TAA could prompt the President to submit the implementing legislation² for the pending free trade agreements (Korea, Colombia, and Panama) to Congress. However, various press reports indicate that Senate Majority Leader Reid (D) has said that the Senate would not act on the pending FTAs until the House passes a renewal of TAA.

Bill Would Renew GSP through July 31, 2013, Provide for Retroactive Refunds

H.R. 2832 would renew the Generalized System of Preferences (GSP) program through July 31, 2013, effective for articles entered on or after 15 days after date of enactment.

Goods entered³ after GSP expired on December 31, 2010, but before the effective date of the renewal provision, that would have qualified for duty-free treatment or other preferential treatment under the GSP statute had the entry been made before GSP expired, would be eligible to be liquidated or reliquidated, with a refund of duty.

Requests would need to be filed with CBP no later than 180 days after the date of the enactment and contain sufficient information to enable CBP to locate the entry, or to reconstruct the entry if it cannot be located.

Any amounts owed would be paid, without interest, not later than 90 days after the date of liquidation or reliquidation.

(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.)

Would Increase MPF for Formal Entries from October 2011 through June 2014

In order to "pay for" the GSP renewal, for the period October 1, 2011 through June 30, 2014, the merchandise processing fee on formal entries would be increased to 0.3464% ad valorem, from the current rate of 0.21% ad valorem, an increase of 65%.

H.R. 2832 would not amend the $485 cap on the maximum MPF for formal entries, nor the minimum $25 MPF for formal entries.

¹Although the House has passed H.R. 2832, it is not yet in effect. Generally, in order for a bill to be implemented, identical versions of that bill must be passed by both the House and Senate, and then the bill must be approved (enacted) by the President.

²FTA, implementing bill, statement of administrative action, etc.

³The terms enter and entries includes a withdrawal from warehouse for consumption.

(See ITT’s Online Archives or 09/06/11 news, 11090609, for BP announcement of the introduction of H.R. 2832.

See ITT's Online Archives or 08/04/11 news, 11080415, for BP summary of Senate agreement for moving FTAs, TAA.

See ITT's Online Archives or 07/13/11 news, 11071320, for BP summary of the “mock” markups of the draft FTA bills at which House Ways and Means Committee Chairman Camp expressed a willingness to markup the FTA implementing bills and a TAA renewal bill on the same day.

See ITT’s Online Archives or 07/08/11 news, 11070822, for BP summary of the House Ways and Means and Senate Finance Committee approval of draft FTA bills with GSP renewal and MPF increase.)

*edited after publication on September 8, 2011 to delete a footnote on the MPF cap and minimum amount for formal entries. See future issue for new details.