Members of Congress are looking to revive trade preferences for developing countries after the flagship U.S. program expired in 2020, warning that foreign adversaries like China have filled the void left by American companies.
The Generalized System of Preferences (GSP) applied to about 119 countries or territories, providing duty-free access to U.S. markets for foreign manufacturers and shipping cheaper products to U.S. businesses and consumers.
“If the United States is serious about moving away from Chinese manufactured goods and creating good-paying red, white and blue jobs, renewing the GSP is a good place to start,” said Sen. Ron Wyden (D-Ore.) , chairman of the Senate Finance Committee, said at a hearing on Wednesday.
The commission met to evaluate the reestablishment of the GSP and the renewal of other preferential programs, especially the African Growth and Opportunity Act (AGOA), which is set to expire in 2025.
“U.S. preferential programs, particularly GSP and AGOA, have long been so uncontroversial and universally accepted in Congress that committee hearings like today were unnecessary,” said Scott Lincicome, vice president of General Economics and the Stiefel Trade Policy Center at the Cato Institute. he told the committee in his testimony.
“The fact that the program has already expired more than three years ago and that we are here today while trade watchers are also openly contemplating the expiration of AGOA is an unfortunate testament to the state of US trade policy in 2024,” he added.
In previous years, the GSP sailed through Congressional renewal, securing a landslide 400-2 victory vote of the Chamber in 2018. However, it expired at the end of 2020 and was not renewed.
Experts in favor of the program report that American companies lost $3.36 billion in tariffs since they expired – a cost they say will be passed on to American consumers.
Florizelle Liser, president and CEO of the Corporate Council on Africa, said preferential access to US markets has an economic impact that spreads across the continent.
“If you want to achieve a resilient supply chain, China is not it,” Wyden said.
Both Wyden and Finance Committee ranking member Sen. Mike Crapo (R-Idaho) said the program would provide an “alternative” to the supply chains China has created with African countries.
“We are losing competition to China in Africa,” said Crapo.
Members on both sides of the Senate are largely in favor of legislation to reinstate the GSP. An amendment containing a renewal clause received overwhelming support during the last Congress, ticket through the Senate 91 to 4.
However, it hit a snag in the House as Democrats sought to add provisions and eligibility requirements related to human rights, gender protection and the environment.
Partisan conflict could again put preferred programs at an impasse this year as Democrats seek to join the Trade Adjustment Assistance (TAA) program, which would commit millions to a fund that helps workers who have lost their jobs due to competition. foreign.
“If we are going to renew a tariff reduction program like the GSP, we should also renew the TAA,” Sen. Elizabeth Warren (D-Mass.) told the committee.
Senators Sherrod Brown (D-Ohio) and Sheldon Whitehouse (D-R.I.) joined Warren, with Whitehouse adding, “we do not intend to expand preferences without Trade Adjustment Assistance being part of the equation.”
But Crapo warned his colleagues against it.
“If people support preferential programs, then they should let them move forward as quickly as possible and without any unnecessary connections,” he said in his opening statement.
Crapo noted that the Chamber is also ready to move forward with restoring business preference programs as long as separate programs are not implemented.
The House Ways and Means Committee past the Generalized System of Preferences Reform Law in April, by 25 votes to 17.
This story originally appeared on thehill.com read the full story
