Washington, D.C. – The House Ways and Means Committee yesterday advanced the Generalized System of Preferences (GSP) Reform Act, which includes Congressman Darin LaHood’s (IL-16) Digital Trade for Development Act. This forward-looking legislation brings the GSP into the 21st Century economy by promoting economic growth around the world and preventing the proliferation of restrictive digital trade policies. The bill’s inclusion counters China’s growing economic influence in the developing world.
 |
 |
In remarks during Committee debate on the General System of Preferences Reform Act, Rep. LaHood stated:
"I want to commend this body for taking up the important task of renewing and revising the Generalized System of Preferences.
The updates that we are considering today will not only promote economic growth around the world but also provide much needed modernization to GSP – America’s oldest trade preference program.
I also want to acknowledge Trade Subcommittee Chairman Smith for his leadership and advocacy on both a renewed GSP and on the Miscellaneous Tariff Bill, or MTB.
These trade preference programs are vital to promoting American manufacturing and ensuring U.S. global leadership, and it is regrettable that we allowed both programs to expire nearly three and a half years ago.
The GSP bill before us today is the first step in getting back on track and I look forward to moving the bill forward and hopefully considering an MTB renewal in the near future as well.
I am especially pleased that the GSP renewal bill we are marking up today incorporates my bill, the Digital Trade for Development Act, which will add new criteria for countries seeking beneficiary status to account for digital trade barriers and deter the proliferation of restrictive digital trade policies.
It is no secret that China has a goal of challenging America’s leadership in the developing world.
As co-chair of the Digital Trade Caucus, I am increasingly concerned by the growing evidence of developing countries enacting similar digital trade policies to China’s restrictive Cybersecurity Law.
Updating and reforming the GSP to support sound digital trade policies advances American strategic interests around the world and protects small and medium-sized businesses from these costly and restrictive digital trade regimes.
I appreciate the Chairman’s inclusion of my bill in the overarching legislation before us, I look forward to supporting the bill shortly, and I yield back."
Background on the Generalized System of Preferences and the Digital Trade for Development Act:
Created by Congress in the 1970s to spur economic development in poor countries through trade, the GSP is a trade program that provides nonreciprocal, duty-free treatment for certain U.S. imports from eligible developing countries. Beneficiary developing countries (BDCs) are selected based on certain mandatory eligibility criteria. The last authorized GSP program expired on December 31, 2020. Today’s renewal legislation would also extend the GSP program through 2030.
Evidence suggests that several developing countries are enacting similar digital trade policies to China's restrictive Cybersecurity Law and related measures at the detriment to their own economic interests. These countries benefit from duty-free access to American markets under the GSP while employing digital policies that undermine American values, jobs, and exports. Updating and reforming the GSP to support sound digital trade policies will advance American strategic interests around the world and promote economic development in the developing world.
The Digital Trade for Development Act would incorporate digital trade as a statutory consideration in designating beneficiary developing countries (BDCs) under the GSP. The legislation would permit the U.S. Trade Representative (USTR) to prevent countries from receiving BDC status if, for example, they restrict the free flow of data or force other restrictive e-commerce policies to the detriment of U.S. strategic interests aimed at technology sectors.
###
