The top Republican on the House Ways and Means Committee said he thinks that the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill ought to be bipartisan policies, and he would prefer that the House and Senate agree on them as freestanding bills rather than "jam it through" on the Senate's National Defense Authorization Act. "I haven’t had a conversation with Chairman [Richard] Neal about adding it to NDAA. If that’s an approach he thinks would work with his members, I would support that -- it’s important to get it done sooner rather than later," Rep. Kevin Brady, R-Texas, added in response to questions from International Trade Today during a phone call with reporters Nov. 16.
Generalized System of Preferences (GSP)
The Generalized System of Preferences (GSP) is a trade preference program established by the Trade Act of 1974, which promoted economic development by eliminating duties on many products when they were imported from one of the 119 countries and territories designated as developing. The program expired in December 2020 and is pending renewal in Congress. Should Congress renew the program with a retroactive refund clause, CBP will refund duties for entries eligible for GSP. Under the GSP, goods that are entirely produced or manufactured in a beneficiary developing country may qualify for duty-free entry under GSP; all third-party materials must undergo a substantial transformation defined as at least 35% of the good’s value having been added in the beneficiary country. The goods must also be “imported directly” from the GSP eligible country.
David Spooner, Washington counsel for the U.S. Fashion Industry Association, said that while the U.S. trade representative's China policy speech was underwhelming, he doesn't think the possibility of renewing 549 exclusions that expired at the end of last year will be the only olive branch to importers hurt by the China trade war. "Will we see other [expired] exclusions open to renewal? A new window open for exclusions? I hear 'yes.' When that will happen, and what that will look like, remains unclear," Spooner said at a virtual USFIA conference Nov. 9.
Finance Committee member Sen. Rob Portman, R-Ohio, bemoaned the fact that the House did not vote on a short-term extension of Trade Adjustment Assistance already passed by the Senate, and told his committee's chairman and top Republican that he would like to be part of bipartisan negotiations to get TAA moving, paired with other trade priorities. Portman, in a letter Sept. 28, also said he worries that passing TAA as part of the Democratic-only soft infrastructure package means the broader trade agenda will be neglected. "As policymakers, I believe we can take steps to support American manufacturing and avoid the root causes for TAA," he said, and argued that renewing the Miscellaneous Tariff Bill and Generalized System of Preferences benefits program, and strengthening antidumping and countervailing duty laws would help.
Importers that used to benefit from the Generalized System of Preferences program have paid about $750 million in tariffs since the program expired at the end of last year, according to a Sept. 21 letter to the leaders of the Senate Finance Committee and House Ways and Means Committee. The letter, signed by more than 300 trade groups and firms, says the lapse of the GSP benefits program hurts workers at importing companies, which are also dealing with much higher freight costs and pandemic impacts.
The top Republican on the House Ways and Means Committee's Trade Subcommittee and Rep. Jackie Walorski, R-Ind., another prominent voice on trade, both proposed amendments to trade legislation that emphasize the complaints that Republicans have about the Democrats' trade policy.
There have been no productive discussions in the last month between Republican and Democratic trade staffers to find a compromise on renewing the Miscellaneous Tariff Bill and Generalized System of Preferences benefits program, Rep. Kevin Brady, R-Texas, said in response to a question from International Trade Today during a telephone press conference. "Regrettably, I see further delays in that because the speaker [of the House] and all her committees are focused on jamming through these tax hikes and welfare expansion," Brady said, referring to Democrats' legislative priorities. Brady said that while the Senate's Trade Act of 2021 is the framework for a bipartisan solution to GSP and MTB renewal, "we need time on task to do that," and he doesn't know if there will be conversations working toward that.
Rep. Kevin Brady, the top Republican on the House Ways and Means Committee, continues to argue that passing the same trade preferences bill that passed the Senate as part of its China package is the best way to get the programs renewed quickly. Brady, of Texas, who spoke to reporters July 20, said that the Senate version of the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill is practical reform. In contrast, he called Trade Subcommitee Chairman Earl Blumenauer's bill ideological, and said it would lead to fewer countries qualifying for GSP. "Am I hopeful that we can bridge the gap? I am. We’ve begun discussions with Ways and Means Democrats on these issues," he said, in response to a question from International Trade Today. "They are in early stages." He said that there are members from both parties on the committee in the talks, along with Chairman Richard Neal, D-Mass.
The American Apparel and Footwear Association asked the Biden administration to bring businesses, shippers and port authorities to the table to find short-term solutions to the shipping crisis.
Concerns about apparel shipments being detained due to a withhold release order were the biggest worry for U.S. Fashion Industry Association Virtual Washington Trade Symposium attendees, and USFIA customs counsel John Pellegrini told them he had no news to allay their fears.
House Ways and Means Trade Subcommittee Chairman Rep. Earl Blumenauer, D-Ore., who introduced a bill a week ago to renew the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill (see 2106170040), said the introduction of a competing bill by the ranking Republicans on the subcommittee and full committee does not alter his assessment of how easy or difficult it will be to move the bills through the House. The Republican bill is largely a copy of the Senate GSP/MTB bill, though there are 60 fewer products in both House MTB lists.