On May 18, 2021, Senate Finance Committee Chairman Ron Wyden (D-OR) introduced the Trade Preferences and American Manufacturing Competitiveness Act of 2021. The legislation would renew the Generalized System of Preferences (GSP) which lapsed in December of 2020 through 2027, reauthorize the Miscellaneous Tariff Bill’s (MTB) implementing legislation, and renew the MTB through 2023. The Senate is scheduled to vote on a motion to proceed this week followed by debate.
Key elements of the Trade Preferences and American Manufacturing Competitiveness Act as outlined by the Senate Finance Committee include:
- Renewal of the Generalized System of Preferences (GSP)
- Extends the Generalized System of Preferences (GSP) program, which eliminates tariffs on certain goods from qualifying beneficiary developing countries, from December 31, 2020 until January 1, 2027.
- Adds new mandatory eligibility criteria, which countries must meet to be eligible for GSP, on human rights and the environment.
- Adds new discretionary criteria, which the President takes into account when designating a country as a GSP beneficiary, on the environment, women’s economic empowerment, rule of law, and digital trade.
- Updates the definition of “internationally recognized worker rights” to include the elimination of discrimination in occupation and employment, which aligns that definition with USMCA and other trade agreements.
- Provides a new requirement for regular country reviews and includes additional transparency requirements for administrative decisions made under the program.
- Provides new reporting requirements on how GSP promotes worker rights and women’s economic empowerment.
- Requires the USITC to study GSP utilization rates, rules of origin, and article eligibility rules.
- Authorizes the Miscellaneous Tariff Bill
- The Miscellaneous Tariff Bill (MTB) reduces or eliminates duties on certain imports (listed in the bill text) that were included at the recommendation of the U.S. International Trade Commission (USITC).
- Pursuant to the 2016 American Manufacturing Competitiveness Act, the USITC considers petitions for tariff reductions on the basis of administrability, whether the revenue loss will be greater than $500,000 per year, and whether there is domestic production of the product.
- Tariff relief will run through December 31, 2023 and be retroactive for four months.
- Reauthorization of the American Manufacturing Competitiveness Act
- Reauthorizes the American Manufacturing Competitiveness Act (AMCA), which was first passed in 2016 and gives the USITC authority to conduct the MTB petition, review, and recommendation process.
- Under this section, the AMCA would be reauthorized for two more MTB cycles, the first beginning in 2022 and the second beginning in 2025.
The full text of the legislation is available here.
For more information on the Generalized System of Preferences or Miscellaneous Tariff Bill please contact our team and see previous posts below.