Trade Committees Working to Renew GSP Before Dec. 31 Expiration
Generalized System of Preferences renewal has bipartisan support in the Senate Finance and House Ways and Means committees, and lawmakers are working to enact legislation before January to extend the program, spokeswomen from the committees said in Oct. 11 emails. "Bipartisan members of the committee are working together on this important issue and committed to renewing this before the end of the year,” the Ways and Means spokeswoman said. A Finance spokeswoman said it’s her committee’s “goal” to reauthorize the program by the end of Dec. 31, when benefits are set to expire.
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While “all the right people are saying all the right things,” no firm indications have emerged that GSP renewal legislation is either being drafted or moving in the committees, a lobbyist who works on GSP said in a brief Oct. 11 interview. Industry is also waiting for signs that GSP renewal will be attached to another piece of trade benefits legislation, such as a miscellaneous tariff bill, after congressional staff earlier this fall floated the possibility (see 1709120021), the lobbyist said. In June, Ways and Means Chairman Kevin Brady, R-Texas, said that members hoped to renew both, without explicitly linking the two (see 1706230008). All considered, there’s still a solid chance GSP renewal legislation will be enacted before GSP’s expiration, the lobbyist said.
“We’re not getting any pushback to the idea of renewal” from lawmakers, Coalition for GSP Executive Director Dan Anthony said during an Oct. 11 event hosted by the Washington International Trade Association (WITA). “We didn’t get that in 2013 either, so … it’s not a guarantee. What is important is that what we’re hearing has all been positive.” Congress did not reauthorize GSP benefits prior to their last expiration, in 2013, and the program lapsed until trade preferences legislation was enacted in mid-2015 (see 1506250019).
Several companies have pleaded for GSP renewal as they face critical sourcing decisions, Anthony said. Ninety percent of companies responding to a Coalition poll indicated they will have placed all their manufacturing orders for 2018 by the end of this week, he said. “Companies are stuck in this position where they’re trying to figure out, ‘What are we going to do?’” he said. As for any firms’ plans to switch source countries, the lobbyist said he hadn’t heard of any such plans being formed as a result of the threat of a lapsed GSP. The issue more closely revolves around whether companies that want to transfer their sourcing from China, for instance, to a GSP beneficiary country like Indonesia or the Philippines will feel confident enough to actually execute the move as GSP renewal stays pending, the lobbyist said.
In addition to pushing for enactment of GSP renewal legislation, Sorini Samet Government Affairs Director Daniel Neumann said during the WITA event that he is engaging with Congress and the Office of the U.S. Trade Representative to reform GSP’s competitive needs limitation (CNL) 504(d) waiver process, which is different from the normal CNL waiver petition process. Under the 504(d) process, waivers from GSP percentage limitations are granted for a list of HTS subheadings for products not made in the U.S. as of Jan. 1, 1995. Neumann says the process should more accurately reflect products’ current production statuses. “We are working with Congress and USTR to hopefully change that to have the CNL be considered in the same way that a new petition would be,” Neumann said. “We think that that both makes sense from a policy side and would fix this weird little situation in the GSP law where the only date it’s being indexed to is a specific calendar year that is now more than twenty years old.”