Trade Subcommittee Chairman Open to CNL Reform, Anxious for GSP and MTB Renewal

The head of the Ways and Means Committee's Trade Subcommittee said that the Generalized System of Preferences benefits program never should have lapsed for two years, and he believes there's interest among House Democrats and Republicans "to get this done in a direct fashion that is timely and useful."

Rep. Adrian Smith, R-Neb., said his staff and Democratic staff have not started talking about how to shape a GSP renewal in a way that could get broad bipartisan support. Generally, GSP and the Miscellaneous Tariff Bill, if not part of a larger package, have moved through the House as suspension bills, which require a two-thirds majority.

Smith said during an interview at the Capitol that he thinks MTB should travel with GSP. "They're related. Let's not delay at all," he said. "The sooner the better. Especially with the supply chain crisis and worker shortages, let's not make these businesses' lives even worse."

Smith said he's open to reforming the competitive need limitation restrictions in GSP, a proposal in the last Congress that got the support of 54 members of the House from both parties. If CNL rules were changed as proposed, products would be restored if the amount produced by a certain country no longer was above a dollar cap as that cap grew over time. Also, the cap would rise faster (see 2112100058).

CNLs do not apply to countries that are part of the African Growth and Opportunity Act (AGOA) or least developed countries within GSP.

He added that trying to change CNL language "should not come at the expense of delay, though."

Smith said that GSP works to divert supply chains out of China, which is another "good reason to get these going, and with countries we want to have strong relationships with."

In the last Congress, the Senate passed a bill that paired GSP and MTB with a directive to the Office of the U.S. Trade Representative that it reopen a broad exclusion process for Section 301 tariffs, or justify why not.

Smith does not favor making GSP and MTB wait for a broader trade bill. He said he hopes that the quadrennial review of the Section 301 action on Chinese goods leads to a new exclusion process for all importers.

"I hope that the Congress is not needed to intervene," he said. "I haven't talked to Ambassador [USTR Katherine] Tai yet, since I'm officially the subcommittee chair. But I'm anxious to do that, I think she's very capable, we've got a good relationship. I want to continue to work on things together."