GSP Renewal Bill Introduced in House, Includes Retroactive Benefits

The Generalized System of Preferences, which expired at the end of last year, had its first move toward renewal Feb. 8, as the chairman and ranking member of the House Ways and Means Committee introduced a bill that would extend the program for three years, the committee said in a press release. "When enacted, the bill introduced today will extend the program through December 31, 2020, and retroactively extend benefits to covered imports that have been made since the program lapsed," the release said.

The legislation includes a reporting requirement that will make it easier for Congress to enforce the program's eligibility criteria, Trade Subcommittee Chairman Dave Reichert, R-Wash., said in a statement. The renewal bill also includes provisions of a bill introduced in October that would modernize the process for granting competitive needs limitations (CNL) waivers (see 1711030048).

“The GSP program saved U.S. companies over $865 million in import duties in 2017, benefiting thousands of companies of all sizes and their employees," Reichert said. Committee Chairman Kevin Brady, R-Texas, told reporters in December that getting GSP passed early this year is a priority (see 1712210029).

Even though GSP is expired, CBP has directed filers to continue to use special program indicators "A," "A+" and "A*" for entries that would otherwise have been eligible for GSP if it were in effect. That's because importers have always been refunded the tariffs when GSP is reauthorized retroactively after each lapse, and tracking the items now will make the refund process smoother (see 1712200005).

Dan Anthony, executive director of the Coalition for GSP, said more than 50 companies have joined the group in the last month. "I think people are definitely paying more attention, they start paying more attention when they start getting bills from custom brokers," he said. While the introduction of this bill is a positive step, Anthony cautioned that getting GSP passed in the next few months still faces obstacles. "I think the challenging vote has always been in the Senate," he said. And that chamber has not introduced a bill yet. The Senate Finance Committee did not immediately comment.

Articles classified by CBP under about 3,500 tariff rate lines were duty-free from all 121 GSP beneficiaries. Countries can graduate from the program when per-capita income rises to the point that it is no longer low-income; certain products can also be excluded if the country exports high volumes to the U.S. The program helped importers avoid more than $865 million in tariffs in 2017, the announcement said. In the past, finding revenue offsets or program cuts to pay for the program is an issue.

Anthony said no one really opposes GSP, which has been around for more than 40 years, but it's not high-profile enough to work as a stand-alone bill. "They’re never going to spend a week of time on GSP," he said. But because it costs money, it can't qualify for unanimous consent. So it needs to ride on another bill or package. It did not make it into the massive spending package the Senate is currently debating; Anthony said that moved quickly, and he didn't get any explanation why GSP was not included.

"It’s a challenge to pass anything, that lack of vehicles means [there are] all those other things we can’t hope to get onto," he said. "What we frequently tell our members is GSP will be renewed at some point. But the timing piece is just difficult." The last time GSP was allowed to expire, in 2013, it was gone for almost two years (see 13080110).