Washington (December 4, 2023)– The Coalition for GSP applauded the introduction of the “CNL Update Act,” bipartisan legislation to update the Generalized System of Preferences’ competitive need limitation (CNL) rules. The legislation was introduced by Representatives Blake Moore (R-UT) and Suzan DelBene (D-WA), who both serve on the House Ways and Means Committee, which has jurisdiction over trade issues. A one-page explaining the bill is available here.
“For years, CNLs have undermined GSP’s effectiveness as a tool to promote development, lower costs for American manufacturers and families, and help companies diversify supply chains into beneficiary countries,” said Coalition for GSP Executive Director Dan Anthony. “The CNL Update Act’s bipartisan, commonsense changes will improve the GSP program, and we look forward to working with Representatives Moore, DelBene, and others to ensure its inclusion in any GSP renewal bill.”
CNLs are statutory thresholds that can trigger lost duty-free treatment under GSP even if there is no domestic production or concerns that imports harm U.S. industry. Congress has not updated the CNL thresholds in over 25 years, and the growth rate for CNLs has declined every year since. Despite the ongoing lapse of the GSP program, more and more products are being affected by CNLs as companies have sought to diversify sourcing outside of China in recent years. Some of the biggest GSP success stories, such as increased backpack imports from Indonesia, are at risk of losing GSP if Congress does not update the CNL provisions as part of renewal.
“Several economic sectors in Utah, including the outdoor recreation industry, rely on an effective and modernized Generalized System of Preferences program to do business,” said Congressman Blake Moore. “But Congress has not considered a significant overhaul of CNLs in the GSP program since 1996, which has led to outdated trade policies that impede production, limit growth, and harm U.S. economic and national security interests. This legislation will give Utah companies the flexibility they need to diversify their supply chains away from China and towards more reliable trade partners around the world.”
“Trade is a foundational part of Washington’s economy and supports over 40% of jobs in our state,” said Congresswoman Suzan DelBene. “The GSP program supports many American industries and helps spread our values abroad. However, aspects of the program are outdated. The legislation we’re introducing today would modernize the program, helping create more jobs at home, strengthen American leadership abroad, and reduce our dependency on China.”
Similar legislation was introduced in the last Congress by former Representative Stephanie Murphy (D-FL) and the late Jackie Walorski (R-IN). Over 50 bipartisan House members supported inclusion of CNL updates as part of GSP renewal last year, but the larger package never came together. In November 2023, 20 bipartisan House members from Florida called for CNL updates in a letter to House Ways and Means Chairman Jason Smith (R-MO) and Ranking Member Richard Neal (D-MA).
