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Reform Competitive Need Limitations in GSP, 54 Representatives Say

A group of 54 members of the House led by Rep. Stephanie Murphy, D-Fla., and Rep. Jackie Walorski, R-Ind., are asking leadership of both chambers to make changes to Competitive Need Limitations in the Generalized System of Preferences benefits program proposed by the pair in H.R. 6171 (see 2112100058).

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Their May 20 letter says that the geostrategic significance of GSP is higher now because the U.S. government desires that companies decide to move their supply chains out of China. "In addition, because GSP has a downward effect on prices, it is especially vital at a time of rising inflation for American consumers. GSP expired at the end of 2020, and we strongly support its reauthorization," they wrote. To bolster GSP, they wrote, it should change CNL rules. "CNLs are arbitrary dollar-value caps that Congress has not adjusted in 25 years. Essentially, if U.S. imports of a GSP-eligible product from a GSP beneficiary country exceed the annual CNL threshold, then that country product loses GSP benefits," they wrote. "It is critical to bear in mind that, when a country's product loses GSP, China is often the main beneficiary. Chinese exports become more competitive vis-à-vis GSP beneficiary country exports, and prices increase for U.S. manufacturing inputs and consumer goods."