Top Ways and Means Republican, GSP Advocates Criticize House GSP Bill
Rep. Kevin Brady, R-Texas, criticized the Democratic approach to the Generalized System of Preferences benefits program renewal after Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., introduced a six-month extension that would change eligibility requirements (see 2012080049). “This is a surprise, and not a welcome one, at this point in the negotiations,” Brady said the evening of Dec. 8. “While I respect the view of Democrats that changes are needed to the program, I support a clean extension that allows us to consider changes under regular order.” Senate Finance Committee Chairman Chuck Grassley, R-Iowa, introduced an 16-month clean GSP renewal, but Democrats in the Senate do not support it, as they prefer an approach that requires higher standards from beneficiary countries.
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The Coalition for GSP said that while there's nothing wrong with changing the parameters of the program, there isn't time for stakeholders to weigh in before Congress leaves town and then GSP expires. The group noted that Blumenauer's legislation requires reports by May 1, and given the only six-month duration of renewal, discussing what the reports revealed and passing a revised GSP two months later are “ambitious timelines in any scenario, but consider that USTR [Robert] Lighthizer didn’t assume his role until May 15, 2017,” the coalition said. “How can USTR be expected to publish major report to drive change discussions and potentially engage in those discussions if the relevant appointees may not yet be in place?”
And, as Coalition coordinator Dan Anthony has argued in the past (see 2001300038), the scope of the benefit to GSP countries may not be enough to get the societal improvements the Democrats are pushing for. “Having criteria does not raise standards, countries attempted compliance with criteria does. If countries don’t view GSP benefits as 'valuable enough' to attempt compliance, the result will be lose-lose: no improvement (and maybe backsliding) in developing countries and higher taxes on American companies,” the coalition wrote. “It’s not hypothetical: Americans [paid] hundreds of millions of dollars due to lost GSP for India/Turkey/Thailand, but there are no policy or development achievements to show for it.”
The last time GSP was up for renewal, three years ago, it lapsed for nearly three months, and importers had to apply for refunds for goods that came in during the lapse.