USFIA Lobbyists Say GSP, MTB Not Priorities in Congress, but Could Get Renewal Before August

As the U.S. Fashion Industry Association's representatives in Washington try to find out timing for a renewal of the Generalized System of Preferences benefits program, Senate Finance Committee staff members are telling them “there’s a lack of urgency with respect to this” among senators. David Spooner, Washington counsel for USFIA, told an online audience March 30 that Congress seems to think that since importers will get refunds for goods that should have qualified for GSP during this period once it's renewed, it's no big deal. “But we know what a pain in the rear the retroactive renewals are,” he said.

In response to a question from International Trade Today, Spooner said his educated guess is that there could be trade bills moving before the August recess. He said he thinks trade promotion authority is the most likely, and perhaps GSP and the Miscellaneous Tariff Bill “moving along with it.” The MTB, which also affects some fashion industry companies, expired at the end of 2020, as did GSP.

Spooner said GSP can be hard to ferry through Congress, because it's a magnet for revenue-related amendments. He said that while there have been calls to change the GSP eligibility provisions to make it harder for countries to qualify, “I think there’s a decent chance we’ll see something with a straight-up renewal.”

Spooner and fellow Barnes & Thornburg colleague Eddie Ayoob, an alumnus of former Senate Majority Leader Harry Reid's office, said that the Uyghur Forced Labor Prevention Act is very likely to pass this year. The bill would push the burden of proof on whether imports from China's Xinjiang region are made with forced labor from CBP to the importers. “I can’t stress enough how bipartisan this bill is,” Spooner said. “It is not a matter of if but when this legislation will pass, and in what form, because there are some differences between the House and Senate versions.”

The industry prefers the Senate version, which would provide a public hearing at which importers could advise what is feasible to enforce (see 2103190052).

Spooner reminded listeners that the Section 301 tariffs are unlikely to be removed even in the medium term, and said the best importers can hope for is another chance to apply for exclusions. “We won’t always agree with Ambassador [Katherine] Tai on trade issues, but I’m confident she will have an open door and at least if she rejects our point of view it will be from an informed perspective,” Spooner said, praising the selection of the former House Ways and Means Committee chief trade counsel for U.S. trade representative.

Spooner predicted that trade from Southeast Asia will be disrupted, as he expects broad sanctions that prohibit dealing with any companies in Myanmar to return. But for Vietnam, where there's a Section 301 case pending on currency that alarmed the apparel industry, Spooner predicts no changes. “I think we will either see the investigation suspended,” he said, or the recommendation will be a commission to study currency issues or just bilateral consultations. He said there are significant weaknesses in the Trump administration's case that currency devaluation in Vietnam hurts domestic firms.

A webinar attendee asked Spooner and Ayoob if there would be more attention to the Central America Free Trade Agreement (CAFTA) as a way to bring more production back to the Western Hemisphere. “I would think yes, and I would say that we’ve seen attempts to bolster CAFTA production under both Democrats and Republicans,” Spooner said. Ayoob noted that the chairmen of the Foreign Affairs committees, although they don't have as much power to influence trade policy as Ways and Means and Finance chairmen do, are both interested in more attention for Central America, the Caribbean and Latin America. Spooner reminded listeners that Rep. Gregory Meeks, D-N.Y., was very active in the CAFTA consultation and ratification process.