Action Unlikely on GSP Renewal Until 2018, as Hopes Fade for CR Inclusion
Congressional GOP leadership is approaching miscellaneous tariff bill and Generalized System of Preferences legislation as priorities for passage in 2018, in which case GSP coverage would lapse after its Dec. 31 expiration, industry officials said in emails. Republicans recently signaled that both MTB and GSP renewal legislation, yet to be introduced, would be included in an expected continuing resolution (CR) to fund the government past Dec. 22, but have indicated this week to industry that the funding package won’t include any such provisions, according to a retail industry official and an apparel industry official.
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President Donald Trump on Dec. 8 signed stopgap legislation to keep the federal government funded and open through Dec. 22 (see 1712110021). “We had thought and heard up until recently that both GSP and MTB would be included as part of the CR, but we are now hearing they won’t be part of the package per leadership,” the retail industry official said. “Not really sure why other than they want a clean CR.” Among the issues complicating fiscal year 2018 funding talks among Democrats, Republicans and Trump -- as the federal government faces a shutdown -- is the question of whether certain additional provisions should be added to a longer-term funding bill, including more hurricane disaster aid for Texas, Florida and Puerto Rico.
The apparel industry official said there’s “still hope” the GSP and MTB language will be included in the CR, but that congressional leadership appears to be backing off the idea. The Senate Finance and House Ways and Means committees are likely still pushing for inclusion, but it’s unclear whether the language will gain enough momentum to be added, the retail industry official said. “I highly doubt that GSP will be renewed by the end of the year,” as it looks “less and less” possible such language makes it into the CR, said an attorney who works on GSP issues and is familiar with congressional deliberations.
Based on discussions held Dec. 19 with both chambers’ trade committees, a trade lobbyist said that lawmakers are discussing advancement of a GSP/MTB trade package in January, “but even that timeline could slip.” Congress “will not vote” on MTB or GSP this month, the lobbyist said. “The primary issue has been the calendar,” the lobbyist said. “Nearly all focus has been on getting the tax reform bill done.” Complications facing a potential January GSP or MTB vote are next month’s expected expiration of the CR to be voted on this week, and potential action on contentious issues including immigration, children’s health insurance and surveillance, the lobbyist said. Benefits under the last MTB expired at the end of 2012.
It “is not unprecedented” for GSP to expire before renewal, and Congress will probably renew GSP sometime in the first quarter of next year, the attorney said. “It happened before, it’ll happen this time around, and in the grand scheme of things, it’s not that big a deal,” the attorney said. “It’s a little bit of a headache for people; it’d be nice if Congress renewed it before expiration, but I don’t think that’ll happen.” MTB could also be in the conversation for approval in the first quarter of 2018, the attorney said.
The federal government set up a procedure starting Jan. 1 whereby importers utilizing GSP can post bond, and be retroactively reimbursed for duties paid on shipments normally covered by GSP, if Congress renews the program, the attorney said. In a Dec. 19 CSMS message, CBP said filers will use the GSP special program indicator to flag entries and pay duties at non-preferential rates for any imports entered after any lapse in the program, as in previous GSP lapses (see 1712200005).
Although GSP coverage appears likely to slip, there’s still “clearly bipartisan support” for renewal, and “no real animus” against any prospective legislation by any members of the trade committees, the attorney said. There’s “very strong support” for GSP renewal and MTB passage, and it’s “just [a] question of timing and process” for enactment, a second apparel industry official said. A spokesman for Finance ranking member Ron Wyden, D-Ore., said Wyden is "happy to move forward on this legislation if the Republicans are able to do so." But GOP leadership of Senate Finance and House Ways and Means, and a spokesperson for Ways and Means Democrats, didn't comment. The offices of Senate Majority Leader Mitch McConnell, R-Ky., House Speaker Paul Ryan, R-Wis., and House Majority Leader Kevin McCarthy, R-Calif., also didn’t comment.