Speculation and Talks in the Trade Market Remain High in Regards to TPA, GSP, and AGOA
With little movement on trade from Congress, several lobbyists are commenting on the likelihood of The Senate Finance Committee marking up a Generalized System of Preferences (GSP) renewal bill and Customs Reauthorization right alongside Trade Promotion Authority (TPA) sometime in April.
Trade Promotion Authority (TPA)
During the American Apparel and Footwear Association¹s summit last week, Senator Orrin Hatch discussed the nation¹s trade agenda with an emphasis on renewing TPA. As Hatch stated ³Without TPA, our trading partners will not put their best offers on the table because they will have no guarantees that the agreement they sign will be the same one Congress considers.² In addition he stated that ³The Obama Administration is currently negotiating some of the most ambitious trade agreements in our nation¹s history. The first is the Trans-Pacific Partnership, or TPP, an Asia-Pacific trade agreement being negotiated between the United States and eleven other countries. And, on the other side of the world, the U.S. is negotiating an agreement with the twenty-eight countries of the European Union.²
Generalized System of Preferences (GSP)
In addition, another trade priority for the Finance Committee agenda is renewing the Generalized System of Preferences (GSP) program which allows certain products from specified developing nations duty-free tariff treatment. Senator Hatch commented that ³Although the GSP program was initially created to assist with economic growth in the developing world, it now assists hundreds of our businesses here in the United States. Across our country, manufacturers and importers benefit by receiving inputs and raw materials at a lower cost. But, unfortunately, these U.S. businesses have faced high tariffs on these imports since the program expired in 2013. Without the GSP program in place, American companies paid over $600 million in tariffs in 2014.² As the non-renewal of GSP extends over time, it will be harder than ever to fully recover any potential financial damages companies faced waiting for a change to take place.
African Growth and Opportunity Act (AGOA)
The African Growth and Opportunity Act (AGOA), which allows sub-Saharan African countries duty-free access into the U.S. market with set regulations, is set to expire at the end of September. Trade with these beneficiary countries has tripled since the agreement enacted in 2000 and the U.S. direct investment in Africa has increased as a result. ³Of course, right now, only a small number of Sub-Saharan African countries are reaping the benefits of AGOA and American exporters continue to face challenges in Sub-Saharan Africa¹s growing markets. We need to do more to ensure the program reaches its full potential. I¹m working with my colleagues on the Finance Committee to craft a reauthorization bill that will improve upon AGOA¹s success, to remove obstacles to trade in Sub-Saharan Africa, and allow both that region and our job creators here at home to benefit from expanded market access,² Sen. Hatch said.
Malaysia Goods and Service Tax (GST)
Effective April 1, 2015, the Malaysian government will be implementing the Goods and Service Tax (GST), a multi-stage consumption tax on goods and services. All goods and services, including imports*, made in Malaysia will be effected by this new tax. To find out more information about how this might affect your business, visit the Official Website for Malaysia Goods and Services Tax.
*Imports excluded from this are specific goods and services categorized under zero rated supply and exempt supply orders as determined by the Minister of Finance and published in the Gazette