GSP Letter Asks for India, Turkey Restoration, Broader CNL Reforms

Importers have paid more than $160 million in tariffs that would not have existed if the Generalized System of Preferences benefits program were in place just since the House passed its version of GSP renewal in April, according to the Renew GSP Coalition. The group, joined by more than 30 trade groups and nearly 300 firms that import goods subject to GSP, said the House bill and the Senate GSP renewal that was part of a trade package that didn't make it into the Chips Act "are a strong starting point for negotiations."

The recent letter from the groups to the Senate Finance Committee leadership said that while they liked the 10-year extension, refunds and updates to competitive need limitations, they'd like to see the CNL changes go further. They endorsed the CNL Update Act (see 2112100058).

The groups cautioned that if eligibility criteria are more stringent, it could "reduce GSP’s effectiveness by making long-term investments too risky. Ultimately, any changes that make GSP harder to use, or easier to lose, make GSP countries less attractive, thereby benefiting non-beneficiaries such as China."

India, which had been the biggest exporter covered by GSP, was removed from the program over market access eligibility issues for American agriculture and medical devices.

The groups said restoring India (and Turkey, which the previous administration said was now too rich too deserve the benefit) would "greatly revitalize" the program. They said almost $1.7 billion of tariffs on Indian products have been paid from January 2021 through April 2024 that wouldn't have been paid if India were in the program (and GSP was in effect). They said importers paid $500 million in tariffs in that same period on Turkish goods that once were covered by GSP.

The groups noted that GSP has been expired almost twice as long as any other expiration since the program was first authorized 50 years ago. "Refunds are not a new, corporate giveaway: they follow decades of precedent and ensure those that continued to use GSP in good faith are not punished for Congress’ failure to renew it in a timely manner," they wrote.

Coalition of New England Companies for Trade (CONECT)'s Counsel Peter Friedmann, in a note to members accompanying the letter, wrote: "There remain some partisan hurdles around Trade Adjustment Assistance, before Congress actually, finally, enacts GSP renewal. Yet even in the partisan environment that permeates DC, I think it will be renewed before Congress finally adjourns at the end of the year."