Haitian Trade Preferences in Must-Pass Bill; AGOA's Fate Unsettled
Congress has not yet finished the text of the government spending bill that needs to pass this week, but House Ways and Means Trade Subcommittee Chairman Adrian Smith, R-Neb., said in the early afternoon that several trade provisions he had hoped would hitch a ride weren't included. He said his understanding was that the African Growth and Opportunity Act wouldn't be attached, nor would the Generalized System of Preferences benefits program.
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The spending bill, which will fund the government through March 14 at current levels while Congress works on agency funding bills for the fiscal year that began Oct. 1, is expected to need both Democrats and Republicans to pass, and Democrats insisted on renewing the Haitian trade preference programs known as HELP/HOPE. Rep. Gregory Meeks, D-N.Y., had also pushed for AGOA to be included; both AGOA and the Haitian preferences will expire Sept. 30. Meeks said in the late afternoon that he was still pushing for AGOA.
About $800 million worth of goods was exported from Haiti to the U.S. under HOPE/HELP last year, the Progressive Policy Institute recently wrote. That's down from 2022, as Haiti's governance has collapsed.
In 2023, $9.3 billion worth of goods covered by AGOA were imported, and, according to testimony last year at a Senate Finance Committee hearing on trade preference programs, importers save roughly $250 million to $300 million annually due to AGOA tariff reductions or elimination.
The Generalized System of Preferences, which Smith had hoped to attach to the bill, used to save importers roughly $1 billion a year in tariffs; it's unknown how much would be saved if it returned, given that some companies may have moved sourcing back to China now that they no longer get tariff savings from sourcing from the Philippines, Cambodia or Indonesia.
Because GSP didn't make it into the bill, it will have been inactive for more than four years when Congress returns in early January. The program has been routinely allowed to lapse since it first began 50 years ago but never for this long.
Smith, who briefly spoke to International Trade Today in a hallway interview at the Capitol, said, "I would have preferred that [GSP and AGOA be included]. I also think heading into next year, we've got a good argument to make of what's good for American manufacturers, supply chains. And AGOA doesn't expire until September. I think folks are well aware of that. And a lot of reasons that we can strategically utilize these programs."