The Senate approved the United States Innovation and Competition Act (USICA) – a $250 billion piece of legislation focusing primarily on research and development funding – by a vote of 68-32. USICA includes the Trade Act of 2021 that was negotiated between Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) and adopted as an amendment by a vote 91-4.
Among the provisions, for GSP specifically the Trade Act would:
- reauthorize GSP, retroactively, through January 1, 2027
- add new criteria on environment, human rights, women’s economic empowerment, rule of law, good governance, anti-corruption, and digital trade
- require public hearings and comments before any country-specific actions can be taken
- extend notification requirements to partial suspensions and not just full terminations
- add new reporting requirements on justifications for review decisions and actions taken
- codify the Triennial Review process to review batches of GSP countries by region (launched in 2017)
- require new reports workers rights, women’s economic empowerment, and rules of origin
The long-term extension and retroactive refunds would be welcome relief for GSP importers, who have paid hundreds of millions of dollars in new tariffs since GSP expired on December 31. However, the Coalition for GSP has concerns that the bill contains many new “sticks” but no new “carrots” to incentivize GSP countries to meet proposed higher standards. The Coalition agrees with U.S. Trade Representative Katherine Tai that a race to the top requires incentives, and “when we talk about incentives, we’re talking about carrots and sticks.”
The future for the overall China package, and individual components such as GSP renewal, remain uncertain. The House must pass legislation too and may seek significant changes, including on GSP.
The Coalition will continue to work with Members of Congress on potential changes that could improve GSP for workers and companies in the United States and beneficiary countries.
To help the Coalition learn about who might be impacted by changes (and receive limited updates going forward), please add your organization to the free GSP supporter list.
To learn about possible benefits or risks to your company, please contact Dan Anthony about becoming a member of the Coalition for GSP.