Outlook Seems Poor for Timely MTB, GSP Renewal

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, accused Democrats of holding up renewal of the Generalized System of Preferences benefits program and said it's unjustified, “because it's always been very bipartisan, and for the most part, almost unanimous.” Referring to Democratic proposals to reform GSP, he said Dec. 15 that “some of the things they’re asking to do are legitimate, but we didn’t hear about some of these things until November 27th, and some of them are technical things that it takes a long time to work out.”

When asked about the prospects for the Miscellaneous Tariff Bill, a House Democratic aide told International Trade Today later in the day: “Republicans have raised complaints regarding process and regular order around GSP negotiations, despite the fact that the provisions are either already in statute or have been introduced in legislation during the 116th and previous Congresses. Consideration of the MTB has gone through even less process, so if questions on process are the cause for GSP delays, then that same standard should be applied to the MTB as well. There is opportunity to take up both items next year through a more regular and rigorous order.”

It's not just a tit-for-tat play, however. The aide said that the Trump administration has “raised some legitimate questions in the past about how this program affects our competitiveness with China, and more scrutiny in the process might help address them, too.”

Grassley said that while the prospects for renewal before the programs expire at the end of the year don't look good, he added, “things tend to come together at the last minute, pretty easy, sometimes, and then sometimes nothing gets done.”

William Reinsch, a former Hill staffer and Commerce undersecretary and current trade expert at the Center for Strategic and International Studies, blogged this week about GSP, saying that though its economic impact is small, since large categories such as apparel are excluded from the program, it typically drew support across the aisle.

“This year, its progress to the president’s desk has been put in question by Democratic proposals to add eligibility criteria to the program, including human rights, rule of law, good governance, and anticorruption,” he said, but while they're noble goals, they could mean GSP expires because of the lack of time to debate the changes.

“One of the arguments against the proposals is timing. They arrived at the end of the Congress, and there is no time to consider them seriously, although they are not new proposals -- some of them have been kicking around for years. The reality is that Congress has consistently failed to seriously review the program. Then, when amendments are proposed at the last minute, opponents say there is no time. Each GSP renewal, often only two years or less, is accompanied by a promise to take a real look at it before it expires again, and each time the promise is ignored. The tragedy is that the victims of this failure are the innocent parties -- lower-income countries trying to grow their economies. I suspect this year’s episode will play out the same way -- the proposed changes will be dropped, and the program will be renewed with promises to take up the amendments next year, only to have nothing happen until a month before the next expiration date.”

Grassley also said he's trying to get the USMCA technical fixes bill into the end-of-the-year legislation, “but I don’t know if we’ll be successful.”