GSP Bill Includes Petition Process That Could Expand Eligibility to Apparel Products
An element of the Generalized System of Preferences benefits package that has passed the House Ways and Means Committee next month could result in some apparel items being added to the eligibility list for the first time, something sponsor Rep. Carol Miller, R-W.Va., has pushed for since 2023.
Importers may petition for an 8-digit Harmonized Tariff Schedule product to be added to the preference program, saying how it would benefit if it is added. Domestic producers and unions may petition for a product currently in the GSP benefits program to be removed, and how they would benefit from that change.
Those petitions to the International Trade Commission would be published on the ITC website, and there would be a public comment period. A year after the bill became law, the ITC would report to the Ways and Means and Finance committees whether the product is an input for U.S. manufacturers; how much domestic production there is of the good; where imports of the goods come from, and with what market share and value; and a summary of objections to the petition.
Congress still would have the opportunity to vote to change the list of eligible products, Miller said -- just as happens with the Miscellaneous Tariff Bill, which also is shaped by an ITC report.
If more goods are covered by GSP, "it'll be wonderful for trade. We'll help the countries we want to trade with. It bolsters their economy as well as ours," Miller said in an interview at her office. She said she also wants to lower costs for American shoppers. "It's mutually beneficial," she said.
GSP covers more than 3,500 products for all 119 countries, plus an additional 1,500 products for least-developed beneficiaries. GSP covered less than 1% of imports in the last year it was in effect; it also only covered 11% of the exports to the U.S. from GSP countries.
Miller hopes that apparel goods get coverage under GSP as a result of this provision. She said some GSP countries have developed strong textile sectors, and haven't had as much market share in the U.S. market as they could if their goods entered duty free.
A senior aide to Miller who sat in on the interview noted that China is dominating in the sweaters category, for instance, and said Miller would like to move that business to countries that are friendlier to the U.S.
He noted that when travel goods were added to GSP, brands quickly moved their sourcing out of China and into GSP beneficiary countries. According to a Congressional Research Service report on GSP late last year, the top imports that will claim retroactive refunds of duties from 2022 were travel bags of manmade fibers, and plastic handbags; plastic suitcases and leather handbags valued at more than $20 were also in the top five. Duties on these categories are 17.6%, 16%, 20% and 9%.
Because domestic interests could tell the ITC that including a particular good would hurt their exports to a factory in Haiti or Central America, the staffer said they didn't expect the addition of apparel for GSP would harm Dominican Republic-Central America Free Trade Agreement production or the African Growth and Opportunity Act countries.
However, he said, they would have to show injury, and wouldn't be able to make a "slippery slope" argument.
Miller said she is hopeful that the bill that came out of committee (see 2404180068) could pass both chambers and become law. However, 17 Democrats opposed the bill during the markup, because Trade Adjustment Assistance has expired, and the committee didn't agree to allow the GSP and TAA to travel together. That issue is what prevented a vote on the bill in 2022 (see 2211160068). When asked if that wouldn't prevent the two-thirds vote needed to move a bill under suspension of the rules -- the way nearly all legislation has moved this Congress -- Miller said, "I'm hopeful that those that really understand will get over themselves and vote for it." She said she doesn't think TAA needs to travel with GSP, but acknowledged, "Things change here hourly."