Washington – The House Ways & Means Committee marked up and passed several trade-related bills today, including legislation on the reauthorization and reform of the Generalized System of Preferences (GSP) program and a bill that would eliminate de minimis benefits for a broad set of imports.
Specifically the committee passed H.R. 7986—“Generalized System Preferences Reform Act”—which would reauthorize the GSP program that offers developing countries the ability to export to the United States without duties on thousands of products that they would otherwise have been subjected to. The bill would direct the U.S. Trade Representative (USTR) to consider the extent to which a country restricts digital trade, including the following specific barriers: “unnecessary or discriminatory data localization or data transfer restrictions, discriminatory treatment of digital products, or forced disclosure of proprietary source code.”
Additionally, the committee passed H.R. 7979—the “End China’s De Minimis Abuse Act”—which would rescind de minimis benefits—which grants duty-free imports for products $800 and under—that are subject to Section 301 tariffs. A summary of the bill states that the bill “would immediately eliminate de minimis for more than half of all de minimis entries from China.”
The markup comes a day after the House Ways & Means Committee held an oversight hearing for the Office of the U.S. Trade Representative Ambassador Katherine Tai. The Senate held a similar oversight hearing Wednesday. During both hearings members questioned Tai about USTR abdicating its role to defend U.S. digital products and services exports, given the significance of digital trade to the U.S. economy, competitiveness abroad, and employment.
The Computer & Communications Industry Association has advocated for digital trade rules that strengthen the global economy for over 50 years.
The following can be attributed to CCIA Vice President of Digital Trade Jonathan McHale:
“We are pleased to see the Generalized System Preferences program reauthorized and amended to ensure that the benefits of this important program are offered to global partners that do not impose unjust or discriminatory digital trade barriers. Conditioning GSP eligibility on the absence of data localization mandates, unreasonable restrictions on data transfers, discriminatory treatment of digital products, and forced disclosure of source code would provide a clear, easily administrable mechanism to ensure that the GSP program reflects the same bipartisan values that have served as the foundation for U.S. digital trade policy for decades. Such baseline standards will not be burdensome for GSP recipients, and help ensure that trade preference programs reinforce principles of open and fair trade in the digital space that we have pioneered and secured with allies around the globe.”
“This initiative is particularly welcome in light of testimony from the Office of the U.S. Trade Representative in Congress this week, underscoring the Administration’s reluctance to tackle digital trade barriers through either negotiations or new rules or enforcement of existing rules. We hope to see the bill’s swift passage in the full House and Senate.”
“CCIA is cautiously monitoring de minimis legislation as it moves through the Ways and Means Committee to the full House. The current de minimis regime aids the operations of businesses of all sizes selling in the U.S. market, particularly smaller e-commerce players that import goods in smaller volumes, for which standard customs procedures incur higher marginal costs. As a general matter, the current de minimis threshold keeps prices down for consumers, an important consideration in any inflationary environment. Any change to de minimis eligibility should be done in a targeted manner and be tailored to address specific harms.”