Congress will return from “August recess” on September 20. The Coalition for GSP is seeking company/association signatures for the letter below, which we plan to send to Congressional trade leaders that same day. The deadline to sign is Friday, September 17.
Only company name and location will be published, for example: Coalition for GSP (Washington, DC)
If you have multiple locations, tell us in the provided box and we’ll contact congressional offices for each listed location despite only listing your headquarters location.
If we have questions, please contact Dan Anthony.
Dear Chairmen Wyden and Neal and Ranking Members Crapo and Brady:
On behalf of the XX undersigned companies and trade associations, we are writing to urge immediate passage of legislation to renew and improve the Generalized System of Preferences (GSP) program and refund tariffs paid to date. Congressional authorization of GSP expired on December 31, 2020. As a result, American companies have paid about $750 million in extra taxes while dealing with ongoing COVID-19 impacts and spiraling freight costs in both the United States and beneficiary countries.
GSP supports American workers and manufacturers by reducing costs of imported inputs and equipment and helps American families make ends meet by lowering the costs of consumer goods imported duty free. A new report shows that expiration has forced companies to raise prices, lose sales, and lay off American workers. GSP’s lapse not only hurts workers but contributes to rising costs for American families and producers. Many companies report reducing orders from suppliers in GSP countries that are the hardest hit by COVID-19 and continued lack of access to vaccines.
In June, the Senate included a 6-year, retroactive GSP reauthorization as part of the “United States Innovation and Competition Act of 2021” (S.1260) with a bipartisan 91-4 vote in favor of the “Trade Act of 2021” amendment. However, companies have paid an estimated $250 million in extra tariffs while awaiting next steps and will continue paying about $3 million a day until GSP is restored. Congress must reach a bipartisan, bicameral compromise to renew GSP as soon as possible.
Furthermore, we are concerned about the “sticks only” approach in both the Senate and House bills that add many new eligibility criteria but no new incentives or assistance to help countries actually meet the updated criteria. Already, GSP’s share of U.S. imports has declined from 1.8% in 2006 to less than 0.7% in 2021. If GSP covers less trade each year, it cannot meet its original development goals, let alone create new leverage in areas such as rule of law, the environment, and women’s rights. Similarly, if changes lead foreign governments to conclude GSP’s compliance burdens outweigh its economic benefits, it would undermine GSP’s viability as a tool to foster trade-based growth in developing countries while also failing to advance the new criteria’s goals.
To address these concerns, Congress should consider broader changes to improve the GSP program as part of renewal. Like eligibility criteria, Congress has not updated program rules such as “competitive need limitations” (CNLs) in decades. As much as one-third of all potential GSP imports are excluded under these rules. Similarly, eligibility criteria aim to raise standards, but there are no processes to exempt good actors in the event of punitive tariffs. Commonsense changes in areas such as these would benefit workers in the United States and GSP countries and increase the effectiveness of any new eligibility criteria.
As the oldest and largest U.S. preference program, GSP always has enjoyed strong bipartisan support in Congress based on a track record of creating jobs in the United States and developing countries. It is not enough for Congress to renew GSP; it must renew it in a way that ensures its continued relevance and support in the 2020s and beyond. We urge you to make this a top priority for Congress.