When the U.S. Generalized System of Preferences (GSP) expired at the end of 2020, American companies – including many in the floral industry — lost access to a trade preferences program that lowers tariffs on imported goods and promotes global economic development. Last week, U.S. Senate Finance Committee Chair Ron Wyden (D-OR) introduced a bill that would reauthorize GSP benefits to once again allow certain developing countries to benefit from duty-free access to the U.S. market.
SAF and other industry groups that led the effort to add roses to GSP in 2020 are particularly hopeful Congress will reauthorize the program, reinstating measures that remove significant flower tariffs. “U.S. wholesalers and importers benefit from the bottom-line relief associated with GSP benefits, most recently as they relate to roses from Ecuador,” said Alice Gomez, SAF lobbyist. “The U.S. floral industry pays an additional $15 million annually without the program in place due to a 6.8 percent tariff on rose imports.”
Chairman Wyden’s bill would reauthorize GSP from Dec. 31, 2020 to Jan. 1, 2027, meaning the benefit would be retroactive back to the program’s expiration. The legislation to reauthorize GSP revamps eligibility criteria for countries participating in the program to reward countries making strides in human rights, women’s economic empowerment, labor, environment, rule of law and digital trade. Specifically, the bill would deny GSP eligibility to any country that fails to enforce its environmental laws or implement its obligations under specified multilateral environmental agreements touching on wild fauna and flora, the ozone layer, pollution from ships, wetlands as waterfowl habitat, Antarctic marine living resources, whalin and tropical tuna. Further, any country that violates internationally recognized human rights standards would be unable to participate in GSP.
“Obviously floral industry players are interested to know whether current GSP beneficiary countries — especially Ecuador — will meet the new eligibility criteria, depending on the direction Congress takes,” said Gomez. “The new eligibility criteria – while tougher in many respects than the former program eligibility criteria – are not so dramatic as to detract lawmakers from renewing the program altogether. Given Democratic control of the House and Senate, a bill will new eligibility requirements has a stronger chance of passare than a bill that simply extends the program status quo.
In addition to Chairman Wyden’s bill, Senate Finance Committee ranking Republican Mike Crapo (R-ID) filed an amendment that mirrors Chairman Wyden’s bill as it relates to GSP renewal. Senator Crapo seeks to include GSP renewal in the U.S. Innovation and Competition Act, a broader China-focused package currently undergoing debate in the Senate. Traditionally GSP renewal is included as part of a broader bill that Congress is guaranteed to pass, such as a bill funding the federal government.
SAF will continue to monitor developments as Congress considers GSP renewal proposals.
Katie Butler is the senior vice president of the Society of American Florists.
