Senate Passes One Year Extension of GSP, Bill Awaiting Signature by President

December 24, 2009

On December 22, 2009, the Senate passed H.R. 4284, a bill to extend the Generalized System of Preferences and Trade Preference Act/Andean Trade Promotion and Drug Eradication Act (ATPA/ATPDEA) through December 31, 2010, clearing the measure for the President.  The House passed H.R. 4284 on December 14, 2009.  H.R. 4284 will now go to the President for his signature.  The Obama Administration has already voiced support for a GSP/ATPA extension.

 Once signed by the President and enacted into law, H.R. 4284 would extend GSP and ATPA/ATPDEA, without change, through December 31, 2010.  For ATPA/ATPDEA, the extension would apply to Colombia, Ecuador, and Peru, the ATPDEA regional fabric tariff preference level (TPL), and the ATPDEA brassiere provision.  H.R. 4284 would also extend through December 31, 2010 (from December 31, 2009) authority for the President to take certain bilateral emergency tariff actions with respect to ATPDEA apparel. H.R. 4284 would move up the deadline for a report on ATPA/ATPDEA, including compliance with eligibility criteria, to June 30, 2010 (from April 30, 2011).

H.R. 4284 would also fund the GSP and ATPA/ATPDEA extensions by extending the merchandise processing fee (MPF) and certain other Customs user fees for 3-4 months.  H.R. 4284 would also make certain revisions to provisions on corporate estimated taxes in Section 202(b) of the Corporate Estimated Tax Shift Act of 2009. 

Representative Levin (D), Chairman of the House Ways and Means Committee's Trade Subcommittee has stated he wants to undertake a comprehensive review of all aspects of preference programs in 2010. He expects the review to consider how well existing eligibility criteria are working and whether improvements or additions are needed (for example, with regard to the environment) and whether all nations that need assistance are getting it.   

Senators Baucus and Grassley of the Senate Finance Committee have stated that they remain committed to reforming U.S. trade preference programs and improving the programs to help alleviate poverty in least developed countries by facilitating sustainable economic growth.  As part of their reform efforts, the Senators plan to examine key elements of the programs, including their duration, eligibility criteria, product coverage, graduation, rules of origin and enforceability.  Reform legislation is expected to be introduced in 2010.

 GSP (i.e., A, A*, and A+) for most beneficiary countries (i.e., other than those listed as African Growth and Opportunity Act beneficiary countries, and ATPA/ATPDEA (for Colombia, Peru, and Ecuador)) is currently scheduled to expire on December 31, 2009, unless H.R. 4284 is enacted.   For AGOA beneficiary countries, both the GSP program (i.e., A, A*, and A+) and the AGOA-GSP program (i.e., D) expire on a later date – September 30, 2015.)