Chamber of Commerce Calls for GSP, MTB Renewal
The U.S. Chamber of Commerce says "it’s critical that legislation to renew the Miscellaneous Tariff Bill (MTB) and the Generalized System of Preferences (GSP) not get lost in the shuffle" during the lame duck session, as Congress tries to find a way to pass funding for the federal government.
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John Murphy, senior vice president for international policy, wrote Nov. 18 that since past votes for MTB and the GSP benefits program had been nearly unanimous, "This shouldn’t be hard."
The MTB renewal proposed by the House Ways and Means Trade Subcommittee chairman would eliminate finished goods in the MTB in future cycles, which the Chamber suggested is the controversy holding up both bills.
MTB is defended as an aid to manufacturers, but includes tariff waivers on a number of consumer products, including scissors, leather belts, certain shoes, electric rice cookers, certain portable stoves, drip coffee makers, leather basketballs, table saws, certain sports rackets, swim goggles, plastic pet carriers, aquarium plastic plants, nail clippers, tweezers, curtain hardware, steam irons and certain microwave ovens.
Products covered by MTB must have no more than $500,000 in annual tariffs in aggregate, and be administrable; otherwise, the only restriction is that no domestic producer or member objects. The last version included 1,655 duty suspensions.
While it's true that the Senate does not agree that the restriction is necessary, (see 2106170040), given that any item can be barred from MTB when a member objects, the differences between the Senate and House versions of GSP and MTB are not the main obstacle; instead, it is the Democrats' desire to make sure that Trade Adjustment Assistance get renewed this year, which Republicans oppose (see 2211160068).
Murphy argued that since the tariff reduction for any item has to stay under $500,000, there's no harm in allowing finished goods. He also said that while it's good to have conditions for GSP, "setting overly strict criteria could lead foreign governments to conclude that GSP’s compliance burdens outweigh its economic benefits. This would undermine the program’s viability as a tool to foster trade-based economic development while also failing to advance the new criteria’s goals. The Chamber encourages lawmakers to work together on any new GSP eligibility criteria under consideration and reach a balanced approach that will allow the program to be reauthorized this year."
And, Murphy said, if GSP cannot be renewed this year, Congress should refund the GSP tariffs paid during the 23 months the program has been gone -- it estimated this at $2 billion.
"Doing so would provide a critical lifeline to U.S. small businesses, many of which are owed hundreds of thousands or even millions of dollars, that have waited nearly two years for Congress to act on GSP," he said.