It's already been a busy year for trade policy, with the United States-Mexico-Canada Agreement (USMCA) and the China 301 Tariffs dominating discussions.
As we inch closer to the Fall, there’s going to be little time to pause and reflect, however. Instead, we must turn our attention to the renewal of the Generalized System of Preferences (GSP) and passage of the Miscellaneous Tariff Bill (MTB) – with both program deadlines on December 31, 2020.
Like any tariff or trade program, their goal is to reduce the cost for importers, and by extension American manufacturers.
GSP is aimed at developing countries and focuses on trade, not aid. Essentially, this gives preference to these countries when we’re trying to source certain products.
GSP is the largest and oldest U.S. trade preference program, and removes duties on a huge list of products. Not only does it help boost their economies but it also benefits the U.S. because we get cheaper goods, saving us in excess of $1billion/year.
The MTB, meanwhile, also covers products coming from overseas – but only those we don’t manufacture domestically. Every two years, the United States International Trade Commission decides which products are eligible, and sends its recommendations to Congress. The House Ways and Means Committee and Senate Finance Committee then decides whether to accept them before drafting a bill that enacts lower duties or removes them entirely.
While neither of these programs are solely focused on the chemical industry, NACD recognizes just how successful and important they are. Both programs are very bipartisan and should be approved – so we’re hopeful they will be passed with few objections or issues.
There are those who want to see some changes implemented but right now, when we’re in the middle of a global pandemic where the time on the floor of Congress is severely limited, we really need to simply focus on getting both programs extended, and having these conversations when things return to normal.
However, given the combined effects of COVID-19 and the inevitable distraction of the upcoming election, there's always a risk that there may not be enough time to get them through.
We've seen the Congressional calendar dramatically reduced this year, and with August and October recess still scheduled, this is one of the tightest legislative schedules we've ever seen. There are a lot of big decisions to be made and they've all got to be condensed into the next few months.
There would surely be economic consequences if a decision on GSP and MTB was delayed and had to be applied retroactively. Rest assured our legislative team is going to be increasingly active over the coming months, interacting with these Committees, and engaging on all the issues.
To find out more about GSP and MTB, and the latest legislative issues affecting the chemical sector, visit https://www.nacd.com/legislative/about-legislative/