MTB, GSP Lapse Decried by House Lawmakers

During a House Ways and Means Committee hearing focused on expanding trade with Taiwan, ranking member Kevin Brady, R-Texas, chose to put in a word for trade preference programs that expired at the end of 2020. "It was a mistake to allow two crucial job-creating programs, GSP and MTB, to have expired. They have now lapsed for almost two years," Brady said, referring to the Generalized System of Preferences benefits program and the Miscellaneous Tariff Bill. "Inaction on these key programs is causing American companies and their workers to lose out to foreign competitors, and additional delay will only increase this impact."

In a hallway interview outside the hearing, Rep. Adrian Smith, R-Neb., said it's unfortunate that the programs' renewal was not hashed out in the conference committee to bridge the differences between the House and Senate versions. "This should be the lower hanging fruit. It's bipartisan," he said. He said that Democrats' proposals "kind of loaded it down to the point it's not going anywhere. We have to keep pushing. Hopefully, there will be something before the end of the year. I hope there is growing urgency by the majority, rather than just kind of accepting the status quo."

Bill Reinsch, a trade expert at the Center for Strategic and International Studies, recently wrote that the differences between House Democrats' and the Senate compromise renewal are not large "but they have been hard fought, with strong feelings on both sides, and there is no reason to think that anything has changed in the past few months ... ."

Brady told International Trade Today during a phone call with reporters that if the issue was just the differences between the two chambers' GSP and MTB, that could be resolved. He said the sticking point is the Democrats' desire to renew Trade Adjustment Assistance, which offers longer-than-normal unemployment benefits and subsidies for health insurance while displaced workers train for new careers. He said that when the administration is not negotiating for any lower tariffs, TAA is something "Republicans simply can't support."

While Brady acknowledged that there are still workers losing their jobs due to foreign competition, he said that with the option of coverage through the Affordable Care Act, "there's just no evidence that the program is needed."

"That has been complicating it so far," he said, but he said he hopes the two parties can focus on what's doable in the lame duck session.

According to the Coalition for GSP, importers paid $1.8 billion in tariffs that would have been waived if GSP had been in place between January 2021 and June 2022. However, all those payments will be refunded once GSP is renewed, as CBP has processed the entries as GSP-eligible. The National Association of Manufacturers says that MTB would be eliminating $1.3 million in tariffs a day if it were in place. Most of that money will not be recoverable for importers, though the bill would allow refunds for entries up to 120 days before enactment.