House GSP, MTB Bills Introduced; Future MTB Lists Will Remove Finished Goods
The Generalized System of Preferences benefits program renewal and Miscellaneous Tariff Bill, as revenue bills, must start in the House, and Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., has a distinctly different take on the longstanding programs than the version that recently passed the Senate with 91 votes.
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He also is not inclined to require the Office of the U.S. Trade Representative to restart the exclusion process for importers of goods subject to China tariffs, which was part of the Senate trade amendment that passed on the Senate's China package. The Senate version gave the administration some wiggle room, but Blumenauer said he wants USTR and Congress to be united on the approach on exclusions. "I want to work with the administration on this and see where they're at. I have tremendous respect for Ambassador [USTR Katherine] Tai. They've been making lots of progress on lots of different fronts," he said. "These are things when she comes up for air, I'd like to talk to her about."
On the Senate counterfeiting provision, Blumenauer said, "On the surface, it appeals to me, but again, that's something we want to do with the administration, in terms of the ability to administer this effectively."
The two versions of the GSP bill are quite similar, though the House version would renew the program through the end of 2024, not the beginning of 2027, and it would add a more stringent environmental protection to the list of eligibility requirements. It would be retroactive. It also calls for an International Trade Commission report on the rules of origin in GSP and utilization rates for all countries and for least-developed countries, and on how the rules of origin prevent transshipment of products from non-beneficiary countries. In the release announcing the bills, it said there were "significant shortcomings" in the Senate trade amendment.
The products covered by MTB vary only slightly between the two chambers. However, Blumenauer wants future MTB lists to be narrower. MTB is defended as an aid to manufacturers, but includes tariff waivers on a number of consumer products, including scissors, leather belts, certain shoes, electric rice cookers, certain portable stoves, drip coffee makers, leather basketballs, table saws, certain sports rackets, swim goggles, plastic pet carriers, aquarium plastic plants, nail clippers, tweezers, curtain hardware, steam irons, and certain microwave ovens. Importers who brought MTB goods in during 2021 but before passage would get refunds.
Products covered by MTB must have no more than $500,000 in annual tariffs in aggregate, and be administrable; otherwise, the only restriction is that no domestic producer or member objects. The last version included 1,655 duty suspensions.
In an interview at the Capitol June 17, Blumenauer said he wants to narrow the eligibility of finished goods. "That's been a major loophole for China," he said. The bill's language said that items that will not undergo any substantial processing or transformation, as interpreted by CBP, will be banned.
A Senate Finance Committee aide said, "Under the current system, any member is free to object to the inclusion of any good -- finished or otherwise. Accordingly, it is unclear why this provision is necessary."
Ways and Means Committee Chairman Rep. Richard Neal, D-Mass., said in a June 17 interview at the Capitol, "I talked to Earl Blumenauer at length about this on Monday. We thought that what the Senate did was a revenue measure, and we believe that the obligation is of the Ways and Means Committee to go first."
Rep. Ron Kind, D-Wis., had said earlier in the week that he thought the MTB, GSP and Trade Adjustment Assistance might have to be packaged together and wait for a vote after the August recess (see 2106160028).
Blumenauer said he will explore whether Republicans would support the GSP/MTB moving under suspension. "I take nothing for granted in this climate. We have an excellent relationship with Vern Buchanan, who's a very constructive member.... We'll see," he said.
The AFL-CIO praised Blumenauer's GSP/MTB bill. It said, "GSP reforms also will help to improve labor standards abroad and support workers organizing in developing nations, including those who face intimidation, harassment or even violence for exercising their rights on the job."
The Senate version says that GSP beneficiary countries must fulfill international environmental obligations and enforce their own laws, but only removes the countries if the violations are sustained and affect trade. The House version has the same standards, but removes the rule that the violations have to affect trade.