The American Apparel & Footwear Association (AAFA) has expressed its support for the GSP “Refund-Only” Bill (HR 8906), which was introduced in the House of Representatives on September 19.
The bill would refund more than $700 million in tariffs paid by American companies on products, including luggage, handbags, backpacks, cases, wallets, and more, due to the expiration of the popular Generalised System of Preferences (GSP) programme on December 31, 2020.
AAFA President and Chief Executive Officer Steve Lamar, in a statement on September 21, said, “Special thank you to Congresswoman Debbie Wasserman Schultz (D-FL) and Congressman Mario Diaz-Balart (R-FL) for the introduction of this important bill.” “The apparel and footwear industry encourages Congress to quickly pass HR 8906 to support American companies that are committed to the values of the Generalised System of Preferences programme, and to help mitigate the costs faced by our nation’s supply chains”.
He said the past few years have seen continuing disruption to supply chains, most recently the threat of work stoppages at America’s ports and along the rail lines.
“Refunding tariff costs on products that should already be duty free allows our members to focus their attention on these supply chain issues and enables companies to keep workers employed.
“While the long-term renewal of the GSP programme is still a top priority, this bill would provide companies with stop-gap relief as they continue to support the American economy,” he added.
The GSP is the largest and oldest US trade preference programme. It is designed to support economic development in select developing countries by removing tariff barriers on qualifying products while supporting worker rights, intellectual property protection, and the rule of law in these beneficiary countries.
Historically, the GSP programme has garnered bipartisan and bicameral support since its inception in 1974 as the programme requires Congressional re-authorisation. The refunding of tariffs collected during prior gaps in the programme’s operation has been common in previous renewal bills.
AAFA has been a vocal supporter of the GSP programme. Most recently, it was one of more than 270 organisations to send a letter to Congressional leadership in May 2022 asking for its renewal.
Bangladesh had been enjoying the GSP facility for a few items, excluding apparel, until the 2013 Rana Plaza collapse. After the deadly industrial accident, the US government suspended the facility for Bangladesh on June 27 that year.
Bangladesh now has 173 green factories certified by the US Green Building Council, which is the highest for any nation in the world. Another more than 500 are waiting for certification.
The US is currently Bangladesh’s largest single country export destination, with goods worth $10.42 billion exported in FY22.
Bangladesh in the past had requested the US authorities several times to restore GSP. It will do so again in the upcoming meeting of the Trade and Investment Cooperation Forum Agreement (TICFA) to be held in Washington in the first week of December.