On April 16, 2015, Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) along with House Ways and Means Chairman Paul Ryan (R-WI) and Ranking Member Sander Levin (D-MI) introduced legislations to renew the Generalized System of Preferences (GSP) and other preference programs, such as the African Growth and Opportunity Act (AGOA).
The GSP program, which expired on July 31, 2013, reduces tariffs on imports from over 130 countries in an effort to promote economic growth in the developing world. The new legislation, if passed, would renew the GSP through December 31, 2017 and apply retroactively to provide refunds for eligible products imported while the program was expired. Currently, American companies have paid over $1 billion in import tariffs since the programs expiration.
Dan Anthony, Executive Director of the Coalition for GSP, stated that “by refunding tariffs paid and extending the program through 2017, Congress would give companies the ability to make long-term sourcing decisions – to the benefit of both suppliers in developing countries and their workers at home.”
Additionally, the new legislation will give the administration new flexibility to suspend or selectively limit the benefits of participating countries, rather than solely being empowered to completely withdraw all benefits. The bill gives the administration the power to initiate an out-of-cycle review of beneficiary countries to determine continual progress in meeting the eligibility criteria. By giving the administration this additional flexibility and power, the legislation attempts to prevent countries from receiving benefits from the preference programs while imposing unfair limits on American imports.
Aaron Ambrite, Extern, Global Trade Expertise