Page 16 - THE SOUTH CHINA BUSINESS JOURNAL
P. 16
C. TODAY
With end-of-year legislation to fund the government Helping developing countries, small business: Renewal
and address other priorities under debate in of GSP is also imperative. For nearly five decades,
Congress, it’s critical that legislation to renew the GSP has promoted economic growth in developing
Miscellaneous Tariff Bill (MTB) and the Generalized System countries by providing duty-free access to the U.S.
of Preferences (GSP) not get lost in the shuffle. market for nearly 5,000 products from about 120
developing countries. This helps spur economic
The MTB and GSP have been renewed by Congress growth and job creation in developing countries.
repeatedly over the past several decades — and always with
nearly unanimous, bipartisan votes. This shouldn’t be hard. American businesses also benefit from GSP. Those
doing so tend to be small but dynamic, according to
And in both instances, failure to act this year will add to the Coalition for GSP. The typical beneficiary company
lost sales and lost jobs for Americans at a time when we employs about 20 people, and GSP saves them
can’t afford it. between $100,000 and $200,000 in duties—big money
for many small businesses.
A helping hand for manufacturers: The MTB temporarily
suspends tariffs on a carefully vetted list of imported The program’s nearly two-year lapse has been costly:
goods, most of which are inputs used by U.S. American families and companies have paid more
manufacturers. Fundamentally, it helps U.S. companies than $2 billion in extra tariffs over the 22 months since
maintain their competitive edge — but its last iteration the program lapsed.
lapsed nearly two years ago.
The China angle: As with many trade issues these
The MTB is meticulously constructed. The U.S. days, China plays a role. The United States imposed
International Trade Commission leads a rigorous vetting tariffs on more than $350 billion of imports from
process established by Congress to confirm that products China in 2017-2018, which created an incentive for
proposed for tariff relief are not made in the United States U.S. importers to source more from developing
or are unavailable in countries
sufficient quantities to benefitting
meet U.S. businesses’ U.S. Chamber Urges from GSP.
needs. In this way, the
program enhances But the lapse in GSP
the competitiveness of
American companies by Year-End Action on hasbeenpushing
U.S. companies to
sparing them needless Trade Bills go back to sourcing
extra costs. from China. Certainly,
Congress didn’t set
Since the previous MTB By John G. Murphy , Senior Vice President for International Policy, out to confer this
expired on December 31, U.S. Chamber of Commerce trade advantage on
2020, manufacturers and China — but that’s
other businesses have paid nearly $1 billion in tariffs, or exactly what the Congress’s inaction on GSP is doing.
$1.3 million per day, on goods that are not available in the
United States. As several hundred companies and business A balanced approach: With the year winding down,
associations recently wrote to Congress on the issue: Congress should take a pragmatic approach to the
debate over GSP’s eligibility criteria. These criteria
These added, anti-competitive costs are stifling provide the U.S. government with leverage to
manufacturers and other businesses in the United States, encourage beneficiary countries to protect intellectual
especially small- and medium-sized companies, at a property, treat U.S. investors fairly, and improve labor
time when they are already working through a slew of practices. Members have been exploring refinements
challenges to produce and provide the essential goods that to these criteria for nearly two years.
our country needs every day.
However, setting overly strict criteria could lead
Where’s the controversy? The last MTB (in 2018) foreign governments to conclude that GSP’s
passed Congress without a single vote in opposition. compliance burdens outweigh its economic benefits.
This is a bill that should absolutely be included in the This would undermine the program’s viability as a tool
expected end-of-year legislative package. As part of this to foster trade-based economic development while
process, Congress must also reauthorize the American also failing to advance the new criteria’s goals. The
Manufacturing Competitiveness Act, which established Chamber encourages lawmakers to work together on
the transparent and accountable process by which MTBs any new GSP eligibility criteria under consideration
are prepared and vetted. and reach a balanced approach that will allow the
program to be reauthorized this year.
Some members of Congress have opposed the inclusion
of finished goods in future MTBs and have sought to bar Finally, if Congress cannot pass a full GSP
tariff relief for goods generally not available from domestic reauthorization, it should consider bipartisan legislation
sources even when no U.S. firm has objected. Given that to refund most of the tariffs paid due to GSP lapse.
no tariff relief petition can be included in the MTB that Doing so would provide a critical lifeline to U.S. small
implies a revenue loss in excess of $500,000 annually — a businesses, many of which are owed hundreds of
fairly severe limit — the possibility of including finished thousands or even millions of dollars, that have waited
goods in future MTBs should continue. nearly two years for Congress to act on GSP.
13 AMCHAM SOUTH CHINA
With end-of-year legislation to fund the government Helping developing countries, small business: Renewal
and address other priorities under debate in of GSP is also imperative. For nearly five decades,
Congress, it’s critical that legislation to renew the GSP has promoted economic growth in developing
Miscellaneous Tariff Bill (MTB) and the Generalized System countries by providing duty-free access to the U.S.
of Preferences (GSP) not get lost in the shuffle. market for nearly 5,000 products from about 120
developing countries. This helps spur economic
The MTB and GSP have been renewed by Congress growth and job creation in developing countries.
repeatedly over the past several decades — and always with
nearly unanimous, bipartisan votes. This shouldn’t be hard. American businesses also benefit from GSP. Those
doing so tend to be small but dynamic, according to
And in both instances, failure to act this year will add to the Coalition for GSP. The typical beneficiary company
lost sales and lost jobs for Americans at a time when we employs about 20 people, and GSP saves them
can’t afford it. between $100,000 and $200,000 in duties—big money
for many small businesses.
A helping hand for manufacturers: The MTB temporarily
suspends tariffs on a carefully vetted list of imported The program’s nearly two-year lapse has been costly:
goods, most of which are inputs used by U.S. American families and companies have paid more
manufacturers. Fundamentally, it helps U.S. companies than $2 billion in extra tariffs over the 22 months since
maintain their competitive edge — but its last iteration the program lapsed.
lapsed nearly two years ago.
The China angle: As with many trade issues these
The MTB is meticulously constructed. The U.S. days, China plays a role. The United States imposed
International Trade Commission leads a rigorous vetting tariffs on more than $350 billion of imports from
process established by Congress to confirm that products China in 2017-2018, which created an incentive for
proposed for tariff relief are not made in the United States U.S. importers to source more from developing
or are unavailable in countries
sufficient quantities to benefitting
meet U.S. businesses’ U.S. Chamber Urges from GSP.
needs. In this way, the
program enhances But the lapse in GSP
the competitiveness of
American companies by Year-End Action on hasbeenpushing
U.S. companies to
sparing them needless Trade Bills go back to sourcing
extra costs. from China. Certainly,
Congress didn’t set
Since the previous MTB By John G. Murphy , Senior Vice President for International Policy, out to confer this
expired on December 31, U.S. Chamber of Commerce trade advantage on
2020, manufacturers and China — but that’s
other businesses have paid nearly $1 billion in tariffs, or exactly what the Congress’s inaction on GSP is doing.
$1.3 million per day, on goods that are not available in the
United States. As several hundred companies and business A balanced approach: With the year winding down,
associations recently wrote to Congress on the issue: Congress should take a pragmatic approach to the
debate over GSP’s eligibility criteria. These criteria
These added, anti-competitive costs are stifling provide the U.S. government with leverage to
manufacturers and other businesses in the United States, encourage beneficiary countries to protect intellectual
especially small- and medium-sized companies, at a property, treat U.S. investors fairly, and improve labor
time when they are already working through a slew of practices. Members have been exploring refinements
challenges to produce and provide the essential goods that to these criteria for nearly two years.
our country needs every day.
However, setting overly strict criteria could lead
Where’s the controversy? The last MTB (in 2018) foreign governments to conclude that GSP’s
passed Congress without a single vote in opposition. compliance burdens outweigh its economic benefits.
This is a bill that should absolutely be included in the This would undermine the program’s viability as a tool
expected end-of-year legislative package. As part of this to foster trade-based economic development while
process, Congress must also reauthorize the American also failing to advance the new criteria’s goals. The
Manufacturing Competitiveness Act, which established Chamber encourages lawmakers to work together on
the transparent and accountable process by which MTBs any new GSP eligibility criteria under consideration
are prepared and vetted. and reach a balanced approach that will allow the
program to be reauthorized this year.
Some members of Congress have opposed the inclusion
of finished goods in future MTBs and have sought to bar Finally, if Congress cannot pass a full GSP
tariff relief for goods generally not available from domestic reauthorization, it should consider bipartisan legislation
sources even when no U.S. firm has objected. Given that to refund most of the tariffs paid due to GSP lapse.
no tariff relief petition can be included in the MTB that Doing so would provide a critical lifeline to U.S. small
implies a revenue loss in excess of $500,000 annually — a businesses, many of which are owed hundreds of
fairly severe limit — the possibility of including finished thousands or even millions of dollars, that have waited
goods in future MTBs should continue. nearly two years for Congress to act on GSP.
13 AMCHAM SOUTH CHINA
