NCBFAA Letter Urges Senate Finance, House Ways and Means to Renew GSP Prior to Expiration
The National Customs Brokers & Forwarders Association of America in a Nov. 6 letter to the Senate Finance and House Ways and Means committees urged renewal of the Generalized System of Preferences prior to its Dec. 31 expiration, saying previous expirations of GSP caused significant economic damage and disruption. “There is longstanding, bipartisan consensus that GSP is a valuable program that should be extended,” NCBFAA wrote. “Congress knows that GSP helps lower the costs of raw materials or component parts for U.S. manufacturers, an important factor in keeping U.S. companies competitive in foreign markets and lowering the cost of finished products to U.S. consumers. Importantly, GSP only applies to products where there is no U.S. production.”
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A potential lapse in GSP benefits would translate to companies facing an estimated $75 million in import tariffs from GSP countries every month until renewal, the letter says. A retroactive refund of tariffs after a post-expiration renewal would put a “particularly severe” cash flow burden on small and medium-sized businesses operating on slim profit margins, NCBFAA wrote. GSP last lapsed between 2013 and 2015, and CBP during the summer of 2016 completed refunds owed to companies during the coverage gap (see 1608080023).
The letter said that the current “uncertainty alone is costly,” as companies placing orders for 2018 delivery can’t realistically delay the orders to “wait and see” if GSP is renewed on time. “Ensuing chaos” ripples across industries as hiring is delayed and new investment is “put on hold,” the NCBFAA said. Thirty-eight House lawmakers wrote an Oct. 27 letter urging House Ways and Means Committee Chairman Kevin Brady, R-Texas, and ranking member Richard Neal, D-Mass., to advance long-term GSP renewal legislation “as quickly as possible” (see 1710300026). Brady in October said he expects his committee to advance GSP renewal legislation by the end of the year (see 1710250056). The committees didn’t immediately comment.