Think Tank Analyst Pessimistic About GSP, MTB, de Minimis Action in Congress

PHILADELPHIA -- Bill Reinsch, a senior scholar at the Center for Strategic and International Studies, told CBP Executive Assistant Commissioner AnnMarie Highsmith that he is pessimistic Congress will vote on any trade bill, whether liberalizing trade, as in the Generalized System of Preferences benefits program or the Miscellaneous Tariff Bill, or restricting it, as in changes to de minimis eligibility or changes to trade remedy laws.

Highsmith, who interviewed Reinsch at the annual CBP Trade Facilitation and Cargo Security Summit, noted that CBP needs statutory authority to get enough data to improve enforcement. Reinsch didn't even mention the customs modernization bill in his first list of trade legislation, and later said the only way to get that done is for the homeland security secretary or CBP commissioner to personally educate members of Congress.

Reinsch said that while it's possible GSP or restrictions on de minimis could pass in a lame duck session, that is less likely if either the House or Senate will be switching party control in 2025. Currently, the House is majority Republican and the Senate is majority Democrat.

Reinsch said even if a bill gets a markup, it could be imperiled by other members trying to get their preferred policies amended to it.

"When people see a train leaving the station, they run to put their baggage on board," Reinsch said.

But, aside from that perennial problem, he said, the core problem is the Democrats and Republicans in the House have not agreed how to write the GSP bill -- what conditions countries should have to meet to gain the preference.

"None of those problems are resolved," he said.

He said if GSP were restored, "it would make a lot of developing countries much more competitive with China, which would be a good thing for a lot of reasons, including our national security reasons, but that case has not yet been persuasive."

And, as for the MTB, it "is getting colder rather than warmer," he said. The fact that Chinese goods are the largest segment of MTB goods is a problem in this Congress.

On de minimis, he said, there are "mixed opinions on whether they should [change] it at all," as well as some members who think lowering the $800 threshold is the right approach, and others who think ending Chinese goods' and shipments' eligibility is the right approach.

He said that customs experts argue that if your goal is to keep out illicit goods in small packages, "taking the [dollar] number down to a lower number from 800 isn't going to solve the problem." As for restricting Chinese eligibility, he said there could be different approaches -- lowering the dollar threshold for China; eliminating eligibility for goods on the Section 301 tariff list; restricting a narrower list of tariffs than 301.

Keeping the status quo and changing de minimis is being actively lobbied on both sides, he noted, and because of the controversy, he doen't think there will be action, which he said is a disappointment, because, he said, "These are problems that are important, that ought to be addressed."

Reinsch said he asked contacts on Capitol Hill about the prospects for action on the Cassidy-Whitehouse Customs Modernization Act (see 2312110048), and he said there was "some interest" in it.

Highsmith later in the day asked attendees to lobby their members on the need to pass that bill and to fund ACE 2.0 to take full advantage of the expanded authorities that would come with the modernization act.

Reinsch said that he was told the committees would tackle it in 2025, but added that promising action "next year" is common on the Hill.

"And then next year arrives, and they'll say: 'Well, we're too busy. We'll do that next year.'"

Reinsch advised Highsmith that if CBP wants movement on it, the DHS secretary and CBP commissioner are going to have to educate members directly about why it's important, and what the costs of inaction are. He said just testifying on the importance in hearings, or in speeches, is not enough. It has to be personal visits.