Industry News

Congress Considering Two-to-Three Year Extension for Preference Programs Set to Expire on December 31st

September 29, 2010


The U.S. Generalized System of Preference (GSP) and the Andean Trade Promotion and Drug Eradication Act (ATPDEA) are set to expire on December 31, 2010 unless Congress passes new legislation extending the programs before adjourning next month. Finance Chairman Max Baucus (D-MT) had sought a five year extension for the programs to avoid potential uncertainly over their fate while Congress worked on reforming the programs. However, concerns over how to offset the accompanying revenue loss have made a five year extension unlikely. As result, Finance Committee staff are now considering a two or three year extension.     

Meanwhile, the staff of the House Ways and Means committee are pushing for the extensions to be considered under suspension of House rules to pressure the Senate into acting expediently. Such a move would likely not be well received in the Senate where Senator Jeff Sessions (D-AL) has threaten to hold any legislation extending the preference programs over the duty-free imports of certain sleeping bags from Bangladesh which he claims put a company in his district at a competitive disadvantage.

Last year, Senator Sessions used the same objections to exact a commitment from the U.S. Trade Representative (USTR) to review the GSP eligibility of down sleeping bags. Since then, USTR has found that the bags are still eligible for the program. This year, Senator Sessions is reportedly holding out for legislation to classify the bags as a textile item which would exempt them from GSP due to import sensitivity.

With Congress’ October 7th adjournment date rapidly approaching, Finance committee staff will need to work fast to resolve the Sessions hold and issues over funding. For more information, please contact a Barnes/Richardson attorney and continue to visit www.barnesrichardson.com.