Customs brokers urge Congress to renew GSP before expiration

The National Customs Brokers and Forwarders Association of America (NCBFAA) is asking Capitol Hill lawmakers to renew a trade preference program that allows for duty-free imports of certain goods into the United States before its year-end expiration.    The National Customs Brokers and Forwarders Association of America (NCBFAA) is urging Capitol Hill lawmakers to renew a trade preference program that allows for duty-free imports of certain approved goods and materials from developing countries before the program expires at the end of the year.
   According to the NCBFAA, the Generalized System of Preferences (GSP) helps lower the costs of raw materials and component parts for many U.S. manufacturers and subsequently lowers prices for American consumers.
   “If GSP renewal does not occur before Jan. 1, companies will face an estimated $75 million in duties on imports from GSP countries each and every month until the program is renewed,” NCBFAA President Geoffrey Powell wrote in letters to the chairmen and ranking members of both the House Ways and Means and Senate Finance committees Monday.
   In recent years, Congress has been unable to pass long-term GSP reauthorizations. Businesses argue that between the period when GSP expires and is eventually renewed, they are saddled with costly supply chain disruptions. Customs broker operations are equally disrupted as they help importers navigate the GSP expiration and reauthorization periods, the NCBFAA noted.
   “The uncertainty [of renewal] alone is costly,” Powell said. “Right now, companies are placing orders for delivery in 2018. Finding alternative sources for products at a competitive price may not be feasible. Nor can they realistically delay the orders to wait and see if GSP is renewed on time. The ensuing chaos creates ripple effects as new hiring is delayed and new investment is put on hold.”
   About 120 developing countries and territories currently participate in GSP. In 2016, the total value of imports that entered the United States under the trade preference program stood at $18.9 billion.