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GSP Renewal Likely Headed for Eleventh Hour Again

The process for congressional consideration of legislation to renew the U.S. Generalized System of Preferences (GSP) beyond its December 31, 2009 expiration continues to move slowly.  Neither the House Ways & Means Committee nor the Senate Finance Committee plan to schedule a hearing on the issue of extending and possibly reforming the GSP and other trade preference programs until October or November.  The prevailing view among staffers in both committees continues to be that Congress still will enact GSP renewal legislation before the year’s end but, once again, action likely will not occur until late in the session.

With the exception of athletic footwear and apparel, essentially all dutiable categories of sporting goods equipment are eligible for duty-free GSP treatment when imported from any of the nearly 140 developing countries that are beneficiaries under the program.  The margin of tariff preference for GSP-eligible sporting goods ranges from 0.8 percent to 5.6 percent, depending on the product.

Some Members of Congress, in particular Finance Committee ranking member Charles Grassley (R-IA), remain interested in amending the GSP statute now to include tougher graduation provisions to trigger the removal of Brazil, India and possibly other advanced beneficiary countries from the program.  However, because of severe time constraints in the congressional calendar, SGMA continues to believe it more likely that Congress will opt for a clean one-year extension of the program later this year and postpone consideration of country graduation and other major reforms until next year. 

POSTED- September 18, 2009