Dear Presidents Wyden and Neal and Rank Members Crapo and Brady:
US Chamber of Commerce urges Congress to act before year-end to push forward long-standing but traditionally bipartisan trade legislation – namely bills to renew the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB) – which expired last December. We also urge you to approve the legislation to extend permanent normal trade relations to the Republic of Kazakhstan. A further delay in approving these measures will result in real and growing costs for American workers and businesses.
For more than four decades, GSP has fostered market-based economic growth in developing countries by providing duty-free access to the US market for certain products. Products imported under the GSP generally do not compete significantly with products made in the United States. More than half of U.S. imports under the GSP are raw materials, parts and components, or other inputs that U.S. companies depend on to produce goods in the U.S. for domestic consumption or export. . GSP also helps American families stretch their budgets by lowering the prices of a variety of generally inexpensive consumer goods. The new tariff costs will likely exceed $ 1 billion per year if the GSP is not renewed.
The Chamber appreciates that the GSP eligibility criteria provide the U.S. government with leverage to encourage recipient countries to protect intellectual property, treat U.S. investors fairly, and improve labor practices, and we understand that members are exploring improvements to these criteria. However, if these revisions lead foreign governments to conclude that the compliance burdens of the GSP outweigh its economic benefits, it would undermine the viability of the program as a tool to foster trade-based economic development while failing to advance GSPs. objectives of the new criteria. We encourage lawmakers and leaders to work together on any new GSP eligibility criteria under consideration and to achieve a balanced approach that will allow the program to be re-authorized this year.
Another trade program that has long enjoyed bipartisan support is the MTB, which temporarily eliminates tariffs on certain imported materials. The United States International Trade Commission is leading a rigorous verification process established by Congress to confirm that products proposed for tariff relief are not manufactured in the United States or are not available in sufficient quantities to meet needs. American manufacturers. The program improves the competitiveness of American businesses and ensures that products made in the United States can compete in domestic and foreign markets.
Congress unanimously approved the last ATV in 2018, but it expired late last year. As a result, US companies are now paying hundreds of millions of dollars in duties on essential inputs that are generally not available from domestic sources. The damage is particularly severe for small and medium-sized enterprises, often limiting the ability of these enterprises to increase production, hire additional workers or invest in new economic equipment.
Finally, the Chamber and our affiliate US-Kazakhstan Business Council strongly support HR 5544, a bill to establish permanent normal trade relations (PNTR) with Kazakhstan, which joined the World Trade Organization (WTO) in 2015. In doing so, Kazakhstan pledged to enact a series of reforms to ensure greater respect for the rule of law, protect intellectual property and open its market to trade and investment.
In turn, Congress must act to ensure that American workers, farmers, ranchers and businesses benefit from the open-market reforms that the Central Asian nation has begun. Specifically, Congress is to pass a short and straightforward bill that grants Kazakhstan PNTR status and exempts the country from the requirements of the Jackson-Vanik Amendment to the 1974 Trade Law. This measure was designed to pressure the Soviet Union to allow Soviet emigration. Jews, prisoners of conscience and victims of religious persecution. For decades, US presidents on both sides have issued annual certifications of Kazakhstan’s full compliance with the Jackson-Vanik Amendment.
Failure to approve this legislation – in line with US commitments as a member of the WTO – could put US goods and services at a disadvantage in the Kazakhstan market and generate new sales, export and trade opportunities. job creation for our European and Asian competitors. In addition, following the United States ‘withdrawal from Afghanistan, approval of this legislation will demonstrate the United States’ commitment to economic stability in the critical region of Central Asia and inspire neighboring countries to join the system. trade based on WTO rules.
The United States Chamber of Commerce urges Congress to approve these bills before the end of the year to ensure that American workers and businesses can reap the benefits of these important trade programs.
Neil L. Bradley
cc: Members of the Senate Finance Committee
Members of the House Ways and Means Committee