Caribbean Basin Trade Partnership Act Draws Wide Support at House Hearing

With only 20 days left before expiration, lead sponsor Rep. Terri Sewell, D-Ala., said she hopes her colleagues will support a clean reauthorization of the Caribbean Basin Trade Partnership Act, and that she fears that trying to move this bill with a Generalized System of Preferences benefits program expansion and renewal will cause delays. She said that the most recent report on the program from the Office of the U.S. Trade Representative said all eight countries are in compliance with their obligations, including labor rights.

Two of the witnesses at a Sept. 10 House Ways and Means Trade Subcommittee hearing said that the program should have stricter criteria, on the environment and on labor rights.

Lauren Stewart, a regional program director for the Americas with the Solidarity Center, testified that the 55,000 garment sector jobs do not include family-supporting wages. She said the minimum wage in Port-au-Prince, Haiti, is a third of the cost of living. Sewell said, “More needs to be done, no doubt,” on labor rights. Rep. Bill Pascrell, D-N.J., who's co-sponsoring the bill, agreed, but added, “Letting this program lapse will only make matters worse.”

Rep. Vern Buchanan, R-Fla., the top Republican on the subcommittee, requested that GSP move with CBTPA, both in his opening statement and in a letter, along with Rep. Kevin Brady, R-Texas, the top Republican on the Ways and Means Committee. “In order to minimize uncertainty for U.S. companies and their partners in developing countries at this particularly vulnerable time, both programs should be renewed together,” they wrote. Rep. George Holding, R-N.C., also said he wants them to move together.

The National Council of Textile Organizations wrote to the committee before the hearing, saying that if CBTPA expires, it would disrupt U.S. yarn spinning operations, “especially in an economic environment that has been challenged as a result of COVID-19.” The NCTO added, “Our support, however, is contingent upon CBTPA renewal not being tied to other unrelated trade and tariff provision that would be detrimental to US and regional manufacturers, such as an expansion of Generalized System of Preference benefits to textile and apparel products.”

It is unclear who is pushing for allowing all GSP countries -- not just least developed countries -- to export apparel duty-free. The chief policy officer at the American Apparel and Footwear Association said that trade group is not, because there are very few legislative days left before the end of the year. The U.S. Fashion Industry Association did not respond to a request for comment.

Brady said during a call with reporters that he doesn't expect that apparel eligibility will be expanded in GSP this year. He said he thinks there's a shared desire among Democrats and Republicans to reauthorize GSP and CBTPA promptly. “Can that be done in September? I don’t know,” he said. Trade Subcommittee Chairman Earl Blumenauer, D-Ore., did not comment on Buchanan's request to let GSP and CBTPA move at the same time during the hearing.

A trade lobbyist said that the U.S. trade representative “has made it clear he has grave concerns about the [GSP] program,” and that worries her about how renewal will go. She said if there's a big fight in Congress over GSP, that could discourage the administration from helping to get the bill through. She's also worried about time running out. “Lame ducks are always super hard,” she said.

Georges Sassine, a board member and former president of the Association des Industries d'Haïti, testified that U.S. apparel imports, through July, are down 35% because of the impact of the COVID-19 recession. Sassine said that some buyers noted that GSP expired before it could be renewed, and they have lost orders in the last year because of the uncertainty of renewal.

Jerry Cook, vice president of government relations for Hanesbrands, testified that his company exports more than 6 million pounds of U.S. cotton every month to support its production in the Dominican Republic and Haiti. He said Hanes “will be at a significant disadvantage if it expires.” Cook said CBTPA has strong customs enforcement, and is very well-managed, so you don't see any transshipment.

Haitian Ambassador Hervé Denis said that 90% of $1 billion in Haitian exports last year were covered by the apparel preference programs. He noted that even though HOPE and HELP preference programs would continue even if CBTPA expires, those quotas would quickly be filled. The Caribbean Basin Act is not limited by quotas.