Arlington, VA–The Retail Industry Leaders Association (RILA) today joined the National Retail Federation (NRF) in urging the U.S. Congress to fast track approve the the General System of Preferences (GSP) program prior to its expiration on July 31 and the August recess.
“The expiration of the GSP program threatens to cut businesses off from their supply chains and the duty savings they count on to create American jobs,” said Bill Hughes, vice president, government relations at RILA. “The benefits of the GSP program have been widely recognized and we urge Congress to acknowledge the global importance of this program by renewing it before the August recess.”
By providing duty-free entry to the United States for a list of eligible products, the GSP program boosts economies in the developing world, while simultaneously allowing US manufacturers to remain competitive. The program lowers the cost of doing business in American markets, giving U.S. families access to more goods at more affordable prices, RILA said.
GSP is a preferential trade program designed to promote economic growth in the developing world and provides for duty-free treatment of certain merchandise that is produced and exported from select developing countries.
Set to Expire July 31
Last year, GSP was responsible for the duty-free entry of nearly $20 billion in eligible goods from 127 developing countries.
Since its introduction in 1974, the GSP program has required periodic renewals. If Congress is unable to pass legislation renewing GSP, imports of eligible merchandise will be assessed duties at ordinary rates beginning on August 1.
The U.S. House of Representatives introduced a bill on July 17 extending GSP to September 30, 2015. The Senate followed with an identical bill on July 18, but whether both houses will approve it in time and get it to President Obama to sign before July 31 is uncertain.
“The American retail industry, an industry that supports one in four U.S. jobs, applauds the leadership of the House Ways and Means Committee for introducing this bipartisan bill that would extend the GSP program for an additional two years,” said David French, senior vice president at NRF. “If Congress fails to extend GSP before the deadline, American retailers, mostly small- and medium-sized businesses, will face an extra $2 million per day in new taxes on everyday goods and inputs, like jewelry and sporting goods, which will translate into higher costs and prices for consumers.”
An article in the National Law Review suggests importers “track their shipments that may be eligible for retroactive duty refunds” should the GSP expire and be reinstated later. “Such retroactive implementation has occurred in the past and may happen again, but importers will need to be proactive in identifying their eligible entries.”