Seventy U.S. senators and more than 300 members of the House of Representatives voted for it the last time around. That is about as bipartisan as you can get in Washington – and yet renewal of the Generalized System of Preferences (GSP) is always a slow and “iffy” thing. GSP, of course, is the U.S. version of a worldwide program to help developing countries use trade to move their economies and their people out of poverty. We have had the GSP program since 1976, so you would think Congress would get used to re-authorizing it. The U.S. Congress always seems dilatory about re-approving our GSP program and then, when all the arguing is done, GSP gets passed overwhelmingly. Go figure.
For those unfamiliar with GSP, the U.S. version allows duty-free entry for close to 5,000 products from 127 developing countries and territories. All the other developed countries have similar GSP programs. GSP is the primary exemplar of the much vaunted “trade – not aid” approach to economic development.Our current GSP program expires on July 31. If nothing is done before then, the zero duties now granted to developing countries automatically go up to the full value that applies to any other country around the world. That could very well happen because GSP votes are often delayed well past the expiration of the previous authorization. Our politicians love to fight about which countries should get GSP treatment or even which products, because you can be sure that some member of Congress is going to go to the mat to protect some constituent’s factory. Amazingly few of our elected leaders seem to realize that the GSP program doesn’t just help developing countries. It also lowers prices for American consumers and provides jobs at factories dependent on imported parts and materials. In fact, in 2005, the U.S. Chamber of Commerce estimated that GSP helps support 80,000 American jobs.
The last time GSP was up for renewal, in 2010, Congress dithered for ten full months before voting overwhelmingly for the program. That delay cost American importers (and consumers and workers) $2 million every day in additional customs duties – that’s a tax increase if any Republicans are reading this. That led some companies to reduce worker benefits, freeze salary increases or even lay American workers off. All just for a delay on the vote.
The Coalition for GSP, a grouping of American companies (small and large), chambers and trade associations is launching a lobbying campaign this coming Monday to make sure that GSP is renewed on schedule. You can join the push here. GSP saved American companies $742 million in 2012. Don’t let Congress screw it up again.
You may have noticed that posts have been sparser than usual. Combine my retirement with a lengthy visit from my 3-year-old grandtwins and that is what you get. I will post intermittently and likely shorter than usual whenever I get a chance to concentrate.