The House of Representatives on Feb. 13 passed legislation renewing the Generalized System of Preferences program for three years, a move that industry groups and lawmakers say will help save companies millions of dollars in tariff costs through 2020.
The House passed the bipartisan measure on a 400-2 vote after just 40 minutes of debate. A companion bill in the Senate has not been introduced.
The legislation renews the GSP program, which provides duty-free treatment to 3,500 imported products from 120 beneficiary, or developing countries and territories, through Dec. 31, 2020. The program expired Dec. 31, 2017, and must be periodically renewed by lawmakers. In the House bill, the renewal covers tariffs paid during the month and a half since the program expired.
The American Apparel & Footwear Association, or AAFA, whose member groups rely on cost savings from products imported from developing nations, supported renewing the program. The trade group said U.S. companies can lower costs on imports and articles not made in the U.S. through GSP, leading to what it said was American companies saving more than $865 million in tariffs in 2017.
"By renewing the GSP program, American businesses can use duty-savings to compete internationally, lower costs for American families, hire more American workers, and invest in new products," AAFA President and CEO Rick Helfenbein said in a statement. "The renewal of GSP also gives the Trump administration an effective enforcement tool to open foreign markets, protect intellectual property, and improve workers' rights."
Rep. David Reichert, R-Wash., introduced the bill in the House on Feb. 8, and it is co-sponsored by nine Republicans and two Democrats.
"By renewing GSP and providing tariff relief, we are creating opportunities for American businesses to grow and re-invest here at home and to compete globally," Reichert said in a statement, adding that GSP saved Washington [state] companies roughly $11 million in duties in 2017. "At the same time, we are strengthening our partnerships with developing countries and ensuring that our trading partners meet the standards of the GSP program."
The Congressional Budget Office said in a Feb. 12 estimate that the bill would add $1.44 billion to the deficit through 2022.
Trade groups have been pressing to expand the GSP to include footwear.
The GSP Footwear Act of 2017 is pending in the House and Senate and would add certain types of footwear imports to the GSP program.
The House bill is before the House Ways and Means Committee's trade subcommittee, while the Senate bill is before the Senate Finance Committee.