On June 17, 2021, the House Ways and Means Committee advanced the Generalized System of Preferences and Miscellaneous Tariff Bill Modernization Act of 2021. The announced legislation follows Senate passage of similar GSP and MTB provisions, as well as Section 301 provisions in the Trade Act of 2021 as part of the omnibus U.S. Innovation and Competition Act. Notably, GSP and MTB renewal are considered revenue measures and therefore must originate in the House. The procedural faux pas was described as “inconsistent with the idea that the Ways and Means Committee would go first” by Ways and Means Committee Chairman Richard Neal (D-MA). While the renewal of GSP, MTB, and Section 301 Exclusions have received broad bipartisan support, procedural hurdles relating to revenue legislation and differing bill text will need to be resolved in conference before a vote can be expected.

Key differences exist between the House and Senate text. A comparison of notable provisions is provided below as outlined in congressional summaries and the legislative text:

GENERALIZED SYSTEM OF PREFERENCES

Renewal Timeline

House

Senate

  • Extends GSP through 2024
  • Extends GSP through 2027

Retroactive Benefits

House

Senate

  • GSP is retroactive to the date of the previous GSP expiration allowing entries to be reliquidated.
  • GSP includes a retroactivity provision allowing importers to get refunds on duties paid since the previous GSP expired on December 31, 2020.

New Requirements and Eligibility Criteria

House

Senate

  • Updates the GSP labor criteria to effectively enforce internationally recognized worker rights and expands the definition to include elimination of discrimination in occupation and employment, and the elimination of violence against workers, including gender-based violence and harassment.
  • Adds new GSP criteria on human rights, rule of law, political pluralism, anti-corruption, and economic development.
  • Adds new annual country eligibility reviews and transparency requirements for administrative decisions made under the program.
  • Enhances public access and participation in the program by creating a new process to receive petitions at any time and setting maximum timelines for reviews to be completed.
  • Requires a study on the rules of origin, women’s economic empowerment, and GSP utilization rates to help the least developed countries receive more of the benefits.
  • Establishes a mechanism to review beneficiary country’s laws related to worker and gender rights. Encourages the adoption of gender-based data collection measures to help create greater equitable economic development outcomes.
  • Adds new mandatory eligibility criteria, which countries must meet to be eligible for GSP, on human rights and the environment.
  • Adds new discretionary criteria, which the President takes into account when designating a country as a GSP beneficiary, on the environment, women’s economic empowerment, rule of law, and digital trade.
  • Updates the definition of “internationally recognized worker rights” to include the elimination of discrimination in occupation and employment, which aligns that definition with USMCA and other trade agreements.
  • Provides a new requirement for regular country reviews and includes additional transparency requirements for administrative decisions made under the program.
  • Provides new reporting requirements on how GSP promotes worker rights and women’s economic empowerment.
  • Requires the USITC to study GSP utilization rates, rules of origin, and article eligibility rules.

 

MISCELLANEOUS TARIFF BILL

Renewal Timeline

House

Senate

  • Extends MTB through 2023 and reauthorizes  the AMCA for two MTB cycles-through 2027.
  • Extends MTB through 2023 and reauthorizes  the AMCA for two MTB cycles-through 2027.

Retroactive Benefits

House

Senate

  • MTB is retroactive for four months (~ 120 days) before the enactment of the bill.
  • MTB, Section 21701(b) gives retroactive effect for 120 days before enactment of the bill.

Substantive Changes

House

Senate

  • Aims to support domestic manufacturers and limit benefits for imports from China by excluding finished products from future MTB cycles.
  • The text includes 1363 products.
  • N/A

 

  • The text includes 1423 products.

 

SECTION 301

Renewal Timeline

House Senate
  • No legislation introduced
  • Not later than 120 days after the date of the enactment of the Act, The Trade Representative, in consultation with such other Federal agencies as the Trade Representative considers appropriate, shall prescribe regulations regarding the criteria that the Trade Representative will apply and the evidence the Trade Representative will evaluate in deciding exclusion requests.

Retroactive Benefits

House

Senate

  • No legislation introduced
  • USTR will reinstate all exclusions for entries filed on or before December 31, 2022, with retroactivity for certain liquidations and reliquidations.
  • Any entry of a covered article on which duties were paid under section 301(b) of the Trade Act of 1974 (19 U.S.C. 2411(b)) and to which a covered duty exclusion would have applied if the entry were made on December 31, 2020, that was made—(i) after December 31, 2020, and (ii) before the date of the enactment of this Act, shall be liquidated or liquidated as though such entry occurred on such date of enactment.

Substantive Changes

House

Senate

  • No legislation introduced
  • Criteria for consideration in implementing the exclusion process include:
    • (A) Whether the failure to grant the exclusion would result in severe economic harm to the requester.
    • (B) Whether the article or a reasonable substitute is not commercially available to the requester.
    • (C) Whether the imposition of the duty with respect to the article would unreasonably increase consumer prices for day-to-day items consumed by low- or middle-income families in the United States.
    • (D) Whether the imposition of the duty would have an unreasonable impact on the manufacturing output of the United States.
    • (E) Whether the imposition of the duty would have an unreasonable impact on the ability of an entity to fulfill contracts or to build critical infrastructure.
    • (F) Whether the failure to grant the exclusion is likely to result in a particular entity or entities having the ability to abuse a dominant market position.
  • Not later than 90 days after imposing any duty under section 301(b), the Trade Representative, in consultation with such other Federal agencies as the Trade Representative considers appropriate, shall publish a notice in the Federal Register regarding the criteria that the Trade Representative will apply and the evidence it will evaluate in determining whether a request for exclusion from such duty satisfies the requirements of the exclusion process under subsection

 

The full text of the Generalized System of Preferences and Miscellaneous Tariff Bill Modernization Act of 2021 is available here.

The full text of the Trade Act of 2021 is available here.

For more information on the Generalized System of Preferences, Miscellaneous Tariff Bill, or Section 301 please contact our team and see previous posts below.

Generalized System of Preferences (GSP) Archives | International Trade Law (cmtradelaw.com)

Miscellaneous Tariff Bill Archives | International Trade Law (cmtradelaw.com)

Section 301 Exclusion Process Archives | International Trade Law (cmtradelaw.com)

Section 301 Tariffs Archives | International Trade Law (cmtradelaw.com)