Stakeholders Make Case to Administration for GSP Travel Goods Expansion
Foreign governments and apparel industry members submitted comments to the Office of the U.S. Trade Representative on why certain travel goods made in advanced developing countries meet the USTR's four criteria for inclusion in the Generalized System of Preferences (GSP) benefits package. Among other filers, the embassies of Sri Lanka (here) and Paraguay (here) said expanding GSP duty benefits to imported travel goods for beneficiary developing countries (BDCs) would not only increase their apparel exports to the U.S., but would also promote social benefits including human trafficking prevention and female access to healthcare and education. The comments were in response to USTR's request for additional public input (see 1608240018) after deferring GSP decisions for additions of travel goods produced in BDCs (see 1607060014) . The interagency Trade Policy Staff Committee GSP Subcommittee is scheduled to hear public testimony from interested stakeholders Oct. 18.
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Currently, China’s 80-percent quantitative share of the U.S. travel goods import market constrains exports and job growth in BDCs, as GSP beneficiaries collectively compose less than five percent of that market, American Apparel and Fashion Association CEO Rick Helfenbein said in a request to testify at the hearing (here). Conferring benefits only to limited-production least-developed beneficiary developing countries (LDBDCs) and African Growth and Opportunity Act (AGOA) countries under GSP wouldn’t mount any serious competition with China, or with Vietnam if the Trans-Pacific Partnership enters into force, Helfenbein said. He added that duty-free access for travel goods would help ensure fairer competition for many AAFA members who report disadvantages when bidding for overseas factory capacity alongside other industries originating in developed countries that offer comparable tariff preferences.
The expansion of GSP would also extend global travel goods value chains and help boost production and improve competition in LDBDCs and AGOA countries, said apparel company Tory Burch (here). The filing asserts that Congress supports the additions of preferential treatment for travel goods, noting that the Trade Preferences Extension Act of 2015 authorizes several of those products to be accorded duty benefits, and that the Haiti HOPE program and U.S.-Korea Free Trade Agreement and TPP also contain beneficial provisions for travel goods imports. Tory Burch also said that applying GSP benefits to travel goods for all BDCs wouldn't hurt the domestic economy because U.S. travel goods producers mostly compete in niche markets “insulated” from import competition.
Michael Korchmar, president of Korchmar, The Leather Specialty Company, submitted the lone testimony (here) in opposition to expanding GSP travel goods benefits, listing 19 U.S. producers of travel goods. He said the U.S. travel goods industry recently reestablished itself and is seeing reasonable growth, after China and more developed GSP-eligible countries’ exports “decimated” it in the 1980s and 1990s. He said that Korchmar stopped facility investment planning since news of possible GSP travel goods tariff “changes” started to circulate. “The suggested GSP modification would most definitely severely impact the health and sustainability of ... U.S. manufacturers,” Korchmar said.
Other requests to testify came from the Outdoor Industry Association, Under Armour, Sports and Fitness Industry Association, the Backpack, Sport and Travel Bag Coalition and the governments of Thailand, Georgia and Lesotho.