An Uncertain Future for U.S. Trade Preferences Programs

This is a joint post with Kaci Farrell.Here we are in the final days of a congressional session, so it must be time to extend whichever trade preference programs are set to expire. This year, the 111th Congress must act (soon!) to extend the Generalized System of Preferences (GSP) program and the Andean Trade Promotion and Drug Eradication Act (ATPDEA). Important parts of the Trade Adjustment Assistance (TAA) program, which provides benefits and services to American workers who lose their jobs due to trade, is also set to expire at the end of 2010.Since 1993, Congress has extended the GSP program nine times—seven times for just one year and five times retroactively. It seems the only certainty of the GSP program is its irregularity. This underscores the third core recommendation of the CGD Global Trade Preference Reform Working Group: to make preference programs permanent or at least long-lasting. (This is not far-fetched— the first two GSP authorizations each lasted a decade.) But the current uncertainty raises costs for participants and makes the program less useful than it could be for promoting development.Yesterday, the House passed an omnibus trade bill (H.R. 6517) which would extend the expiring programs for 18 months. However, it is unclear whether the Senate will take up, or approve the legislation.Kudos to Ways and Means Committee Chairman Sandy Levin (D-MI) for crafting the House bill and ensuring that extension didn’t slip through the cracks. I hope the Senate will move quickly to pass the legislation. But we can we finally get some much-needed reforms next time?Update: On December 22, Congress approved a six-week extension of the ATPDEA preference program and certain benefits for U.S. workers who lost their jobs due to trade. But (unsurprisingly and unfortunately) the Senate failed to extend GSP, which will expire on December 31, 2010. Hopefully, preference issues will remain on the legislative calendar. In separate press releases, Senate Finance Committee Chairman Max Baucus (D-MT) vowed to fight for longer-term extensions in the 112th Congress, while Ranking Member Chuck Grassley (R-IA) underscored his focus on implementing pending trade agreements with Columbia, Panama, and South Korea.