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Industry renews GSP travel goods push; Lighthizer promises review

March 21, 2017

A slew of industry groups has issued a fresh request to President Trump to immediately provide duty-free access to the U.S. for all eligible travel goods products in the Generalized System of Preferences from all GSP countries.

Trump’s U.S. Trade Representative pick Robert Lighthizer, in response to questions submitted for the record following his March 14 confirmation hearing, remained non-committal when pressed on the issue by senators from both sides of the aisle. Lighthizer in response to questions by Senate Finance Committee ranking member Ron Wyden (D-OR) and Finance members Pat Roberts (R-KS) and John Cornyn (R-TX), said he would look into the issue but offered no hint as to how he would advise Trump.

“I understand there is a great deal of interest by some members of this committee, and travel goods importers, in extending duty-free treatment to the more economically advanced GSP countries for travel goods,” he stated in response to three separate questions from the senators. “If confirmed, I commit to review this issue carefully, consult with this Committee and the Ways and Means Committee, and advise the President accordingly.”

Lighthizer’s response comes as 18 industry groups issued a letter to Trump on March 20, arguing that designating all eligible travel goods products duty-free when imported from all GSP countries follows bipartisan congressional intent and would also siphon jobs back from China to the U.S.

“This would spur real relocation of U.S. sourcing from China, which is not eligible for the GSP,” the industry letter states. “It would also give the U.S. more enforcement leverage over the GSP countries’ trade policies and actions, which is a key aspect of the GSP program.”

USTR has been repeatedly slammed by U.S. travel goods importers and retailers as well both parties in both committees for its initial decision last June to only extend GSP benefits for travel goods to non-LDC and non-AGOA countries and defer on extending preferences to those two categories.

In January, then-USTR Michael Froman told sources that he would issue a non-public recommendation to Trump's incoming trade team that it should extend those preferences to all GSP beneficiaries, as opposed to GSP countries that are not members of the African Growth and Opportunity Act and countries that are not considered least-developed countries as is currently the case. Froman however, did not recommend that President Obama issue a presidential proclamation to that effect.

“Although the previous Administration agreed that expanding duty-free treatment of travel goods to all GSP countries was the right decision, per the 2015 law, it failed to issue the proclamation that would enable that decision to enter into effect,” the industry letter to Trump states.

“Unfortunately, every day the Administration postpones duty-free sourcing from GSP countries costs the travel goods industry more than $200,000 in duties paid. That means every passing day without action delays the ability of U.S. companies to hire workers or to pass along duty savings to American consumers.”

“We urge you to immediately issue a proclamation designating all statutorily eligible travel goods products for all GSP-eligible countries in the GSP program. This will complete the work that was started in 2015 and authorized by Congress, and enable travel goods companies to expand U.S. employment and pass savings to U.S. consumers,” it concludes. – Jack Caporal (jcaporal@iwpnews.com)

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