Congress Expected to Approve GSP/FTA Bills with Higher MPF on Oct 12
The House is scheduled to vote on the Senate-passed GSP/MPF/TAA bill on Wednesday, October 12, 2011. Approval is expected and GSP's retroactive renewal through July 31, 2013 would take effect 15 days after the President signs the measure into law. Press reports indicate that the House and Senate will also vote on the three pending free trade agreements (Korea, Colombia, and Panama) on October 12, 2011; passage of these three measures is also expected.
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The following is an explanation of the MPF provisions in the GSP bill and the KORUS and Colombia FTA bills.
MPF Rate Provisions in GSP and KORUS Bills
The following table illustrates the different MPF rate provisions in the GSP and KORUS bills for formal entries (the Colombia bill only extends the MPF; it does not adjust the rate):
| 10/11-11/15 | 12/15-09/16 | 10/16-09/19 | |
| GSP Bill | 0.3464% | 0.21% | 0.1740% |
| 10/11-11/15 | 12/15-09/16 | 10/16-06/21 | |
| Korus Bill | N/A | 0.3464% | 0.3464% |
If the KORUS bill is enacted after the GSP bill, the KORUS bill’s MPF provisions would be expected to override the GSP bill’s MPF provisions for the overlapping time period, resulting in a 0.3464% MPF rate for the entire October 1, 2011 -- June 30, 2021 period. The current MPF rate is 0.21%.
(Neither bill would raise the $485 MPF cap for formal entries, so under a 0.3464% MPF rate, the $485 maximum MPF would be paid more often (on formal entries valued at $140,012 and up1). The $25 minimum MPF for formal entries would be paid less often (on formal entries valued at $7,217 or less2).
42-Day MPF Prepayment and Reconciliation Provisions in GSP Bill
The GSP bill also contains a prepayment and reconciliation requirement for the MPF for formal and informal entries during a 42-day period in 2012.
Prepayment. The GSP bill would require the MPF for formal and informal entries of goods entered October 1, 2012 through November 11, 2012 to be paid no later than September 25, 2012.
The amount that would have to be pre-paid would be equivalent to the amount of such fees paid by the person responsible for such fees with respect to goods entered October 1, 2011 through November 11, 2011, as determined by the Treasury Secretary.
Reconciliation. The GSP bill would also require the Treasury Secretary, no later than December 12, 2012, to reconcile the fees pre-paid pursuant to the above provision with the fees for services actually provided for October 1, 2012 through November 11, 2012 and refund with interest any overpayments or make the proper adjustment with respect to any underpayments. (No interest would be assessed on such underpayments.)
None of the FTA implementing bills contain a provision that would override this prepayment/reconciliation requirement.
MPF Extensions in KORUS and Colombia Bills
The KORUS bill would extend the MPF for formal and informal entries from January 8, 2020 through August 2, 2021. The Colombia FTA would further extend the MPF for formal and informal entries from August 3, 2021 through September 30, 2021.
(MPF extension provisions are often used to offset the cost of trade bills.)
1rather than on formal entries valued at $230,952 and up, as it is currently.
2rather than on formal entries valued at $11,905 or less, as it is currently.
(See ITT's Online Archives 11100723 for summary of expected House vote on GSP bill on October 12, 2011.
See ITT's Online Archives 11100721 for announcement of Senate Finance mark-up of FTA bills on October 11, 2011.
See ITT's Online Archives 11092716 for summary of the MPF provisions in Senate-passed H.R. 2832.
See ITT's Online Archives 11090916, for summary stating that the MPF cap would be paid more often under House-passed H.R. 2832.)