The American Apparel & Footwear Association (AAFA) welcomed the introduction of the Generalized System of Preferences Update for Production Diversification and Trade Enhancement Act (GSP UPDATE Act), legislation that would make U.S. imports of travel goods like luggage and backpacks, among other items, eligible for duty-benefits under the Generalized System of Preferences (GSP) program.
The GSP UPDATE Act was re-introduced today in the U.S. House of Representatives by Representative Ander Crenshaw (R-FL) and co-sponsored by Representative Adrian Smith (R-NE).
"With summer just around the corner, extending GSP benefits to travel goods is one way Congress can make millions of family vacations much more affordable," said AAFA President and CEO Kevin M. Burke.
"By extending duty free savings to travel goods, this bill supports hardworking American families by offering more affordable travel goods and U.S. workers through increased sales. I applaud Representative Crenshaw and Representative Smith for their hard work in supporting American families and U.S. workers."
"The GSP Update Act is one of the most significant changes to the GSP legislation in the last 39 years," said AAFA Vice Chairman Rick Helfenbein, President of TellaS Ltd. "By making travel goods eligible for duty free treatment under GSP, this important legislation opens the door for GSP eligible countries to compete with China in an area where China has dominated. Countries like the Philippines and Cambodia will now have the opportunity to participate in a meaningful way, and U.S. buyers will be afforded greater choice."
As introduced, the GSP UPDATE Act would recognize that travel goods are no longer an "import sensitive" industry by removing the current prohibition that prevents most travel goods from being eligible for duty-benefits under GSP. Under GSP, developing countries like Cambodia, Thailand, and the Philippines, will be able to export travel products to the United States duty-free. Under the GSP UPDATE Act, China and Vietnam are not eligible to participate in the GSP program.
While making U.S. imports of travel goods potentially eligible for duty-benefits under GSP, the bill continues to protect the remaining domestic manufacturers by 1) excluding from GSP eligibility certain specific types of travel goods still made in the United States and 2) requiring the U.S. government to do a review, and request public comment, before implementing any duty-benefits for travel goods under GSP.
Duties on the lowest-cost travel good can be as high as 17.6 percent. Today, 99 percent of travel goods sold in the United Sates are imported, meaning that these duties amount to an unavoidable, hidden, and regressive tax on American consumers.
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