On Thursday, June 22, House Democrats proposed a bill named the “American Worker and Trade Competitiveness Act”, which aims to reauthorize and update key trade programs aimed at enhancing U.S. trade competitiveness and supporting workers. Introduced by Earl Blumenauer (D-OR), ranking member of the Ways & Means trade subcommittee, the bill focuses on the Generalized System of Preferences (GSP), the Miscellaneous Tariff Bill (MTB) and Trade Adjustment Assistance (TAA).
The GSP, which offers preferential trade benefits to developing economies, expired in 2020, subjecting many developing countries to higher duty rates. Blumenauer’s bill proposes to retroactively reauthorize the GSP through 2026, allowing refunds on duty paid during the lapse period. The GSP provisions in the bill align with requirements sought by House Democrats in the U.S.-Mexico-Canada Agreement (USMCA), incorporating environmental, labor, human rights, rule of law, and anti-corruption standards identical to those in the African Growth and Opportunity Act (AGOA).
Additionally, the bill authorizes suspensions on duty and reductions for specific imports in accordance with the Miscellaneous Tariff Bill Act of 2018 (MTB), which expired on December 31, 2020. An MTB is a law that temporarily reduces or suspends the import tariffs paid on particular products imported into the United States. The American Manufacturing Competitiveness Act of 2016 (AMCA) outlined the US International Trade Commission’s (ITC) current process for determining which products are to be included in an MTB. The proposed bill reauthorizes the AMCA for two more MTB cycles and excludes finished products from future MTBs. The legislation also authorizes duty suspensions and reductions for approved imports until December 31, 2024, retroactive four months before enactment.
The TAA, which was created in 2002 to support workers who have lost their jobs due to foreign competition, expired in June 2022. The bill seeks to reauthorize and increase funding for TAA, expand eligibility for affected workers, and introduce overdue provisions for program improvement.
As discussions and debates in Congress unfold, the proposed legislation could hold significant implications for global trade dynamics and U.S. efforts to diversify global supply chains away from China. The bill represents a significant step in renewing and modernizing key trade programs, signaling the U.S. government’s commitment to strengthening trade competitiveness and supporting American workers in an evolving economic landscape. The bill is under current review with the United States House Committee on Ways and Means.
Crowell & Moring, LLP continue to monitor this development and the potential impact to businesses and consumers moving forward.