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Camp Floor Statement H.R. 2832, the Renewal of the Generalized System of Preferences

September 07, 2011

Mr. Speaker, this bipartisan legislation, which renews the nearly 40-year-old Generalized System of Preferences, is a vital part of a robust trade agenda – an agenda that makes American companies more competitive and increases American exports.  GSP is an important tool for boosting economic growth and job creation.

Just last week, we learned that on the whole there was zero job creation in August and that the unemployment rate remains above 9 percent.  Over the next several weeks, Congressional Republicans will bring several bills to the floor that will address the shortage of American jobs and help promote job creation.  This legislation is an important component of that effort because GSP is critical to the competitiveness of many American manufacturers.  Having more competitive American companies means creating and supporting more American jobs.  The lapse of this program since the beginning of the year has unnecessarily imposed higher costs on American manufacturers and consumers at a time when we can least afford it.  

The GSP program is the largest U.S. trade preference program and provides duty-free treatment to non-sensitive imports from over 130 developing countries.  Many U.S. companies source raw materials and other inputs from GSP countries, and the duty-free treatment of these imports reduces the production costs of these U.S. manufacturers, making them more competitive.  

Nearly three quarters of all GSP eligible imports are raw materials, components, parts, or machinery and equipment used by American workers to manufacture goods in the United States both for consumption here and for export.  

According to analysis by the Coalition for GSP, approximately 82,000 jobs are either directly or indirectly associated with the importation and use of GSP-eligible imports.  The clear connection with jobs reinforces how important it is that this program is renewed.

Many of the jobs supported by GSP imports are jobs in Michigan, where the unemployment rate remains almost two percentage points above the national average.  Unfortunately the lapse in the GSP program has forced employers in Michigan to pay over $9 million in unnecessary duties.  Instead of paying unnecessary duties, these employers could have been paying $9 million more in needed salaries.

The legislation renews the program until July 30, 2013 and permits importers to apply for duty refunds for eligible products imported since the program’s expiration on December 31, 2010.  This retroactive renewal will provide a timely infusion of capital to U.S. manufacturers that have faced higher duties and therefore higher production costs since the program expired.  It will allow them to compete with manufacturers abroad who already have duty-free access to such inputs.

I also note that this legislation will not add to the deficit, as the costs are fully offset.

I would like to thank my colleague, Ranking Member Levin, for working with me to find a path forward for this legislation.  Given how important this legislation is, I hope that our colleagues in the other body will act quickly.  

Mr. Speaker, I want to emphasize how important this job-creating legislation is for American manufacturers and their employees by creating and supporting American jobs.  It is a valuable part of an aggressive, pro-growth trade agenda.  Mr. Speaker, I urge all my colleagues to support this bipartisan legislation.