Update on GSP Renewal Roadblocks, Hold & Retroactivity Still Issues

In addition, a trade source notes the outlook for GSP renewal could be more favorable now than at the end of 2010 (when it expired) because supporters have greater flexibility to choose different procedures for moving GSP renewal legislation through Congress.

(With so little time left at the end of 2010, GSP supporters were essentially limited to moving GSP extension legislation under expedited procedures (such as unanimous consent in the Senate). However, since it is now the middle of the congressional session, there could be other options for moving GSP extension legislation (e.g., under “regular” procedures.)

Timing, Retroactivity, Legislative Procedures Still Need to be Worked Out

Various issues related to renewal of GSP still need to be resolved, such as the length of a renewal, whether a renewal would be retroactive, how a GSP renewal would be packaged (individually or in some combination with legislation on other preference programs or other trade provisions such as Trade Adjustment Assistance (TAA), permanent normal trade relations status for Russia, etc.), what procedures will be used to move such legislation through Congress (e.g., for the Senate - unanimous consent versus regular order, etc.), how a GSP renewal would be funded, etc.

Senate Hold Still Likely, Opposition to Sleeping Bag Carve-Out Continues

Sources state it is likely that Senator Sessions (R) would place a “hold” on GSP renewal legislation as he has done in the past, until certain non-down sleeping bags (HTS 9404.30.80) are removed from GSP-eligibility either administratively or by a carve out (exclusion by law). (See ITT’s Online Archives or 03/07/11 news.

(In October 2010, the U.S. Trade Representative accepted for review in the 2010 GSP Annual Review, a petition to withdraw from GSP eligibility certain types of “non-down” sleeping bags (HTS 9404.30.80). In March 2011, the ITC released the public version of its report on the likely impact of eliminating duty-free GSP treatment for “non-down” sleeping bags from all countries. Although this report does not include the ITC’s findings regarding probable economic effect, it does note that U.S. imports of the subject sleeping bags declined by 35% during 2005 -- 2009 and that since GSP’s expiration, the U.S. sleeping bag producer petitioner has hired additional workers. See ITT’s Online Archives or 03/03/11 news, [Ref:11030315">11030733), for BP summary of legislation introduced by Senator Sessions to renew GSP and remove certain sleeping bags from GSP eligibility.)

(In October 2010, the U.S. Trade Representative accepted for review in the 2010 GSP Annual Review, a petition to withdraw from GSP eligibility certain types of “non-down” sleeping bags (HTS 9404.30.80). In March 2011, the ITC released the public version of its report on the likely impact of eliminating duty-free GSP treatment for “non-down” sleeping bags from all countries. Although this report does not include the ITC’s findings regarding probable economic effect, it does note that U.S. imports of the subject sleeping bags declined by 35% during 2005 -- 2009 and that since GSP’s expiration, the U.S. sleeping bag producer petitioner has hired additional workers. See ITT’s Online Archives or 03/03/11 news, [Ref:11030315, for BP summary of the ITC’s report.)

The source notes that there continues to be opposition by certain members of Congress to a legislative carve-out.

Another trade source has previously mentioned that Senate Republican Whip Kyl might also put a hold on a GSP extension measure if the Colombia Free Trade Agreement is not considered first.

(The Congressional Research Service states that “holds” allow Senators to provide notice to their party leader of their intent to object on the floor to taking up or passing a measure or matter. Their potency as a blocking, delaying, or bargaining device is linked to Senators’ ability to conduct filibusters or object to unanimous consent agreements or requests. Ultimately, it is up to the majority leader of the Senate -- who sets the Senate’s agenda after consulting various people -- to decide whether, or for how long, he will honor a colleague’s hold.)

GSP Coalition Says Retroactive Renewal an Issue

The Renew GSP Today blog, run by Coalition for GSP, a group of U.S. companies and associations that benefit from the GSP program notes that retroactivity (i.e., refunds for tariffs paid to date) has been brought up at many of its recent Capitol Hill meetings. The Coalition states that the thinking is that any GSP renewal will be limited in duration based on the funding available.

Given the question of whether companies would prefer a refund of past duties paid but less certainty about future GSP benefits or are willing to forgo duties paid since GSP expiration in order to guarantee GSP benefits further into the future, the GSP Coalition is seeking company input for its poll on the cost of GSP expiration. Poll available here.

GSP Advocates Urge Supporters to Contact Congress, Sign List

The Coalition for GSP continues to state that businesses that depend on GSP should contact Congress daily if they want a chance at renewal. Contact your Senators by clicking here. Contact your Representative by clicking here.

The Coalition is also calling on GSP importers to join its supporter list, which now includes almost 200 organizations. The Coalition includes new supporters in its regular updates to Congressional staff. Click here to add your name to the list.

Nine Ambassadors to U.S. Write Gov’t Asking for GSP Renewal

On May 3, 2011, the U.S. Ambassadors from Indonesia, Kosovo, Mongolia, Nepal, Paraguay, Philippines, Sri Lanka, Thailand, and Uruguay sent a letter to the Senate Finance Committee (and copied various Administration officials) asking that GSP be renewed as quickly and for as long as possible.

(GSP for most beneficiary countries (A, A+, and A*), i.e., other than those listed as African Growth and Opportunity Act (AGOA) beneficiary countries, expired on December 31, 2010.)

Ambassadors’ letter available by emailing documents@brokerpower.com.

(See ITT’s Online Archives or 03/10/11 news, 11031025, for BP summary on the GSP Coalition’s list.

See ITT’s Online Archives or 04/29/11 news, 11042926, for BP summary of USTR’s desire to have next step for pending FTAs to include GSP, etc.

See ITT’s Online Archives or 04/06/11 news, 11040616, for BP summary of USTR statement that GSP and ATPDEA merit renewal.

See ITT’s Online Archives or 05/29/11 news, 11042926, for BP summary of USTR’s statement saying next step for pending FTAs to include GSP, etc.)