[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7986 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 7986
To modify and reauthorize the Generalized System of Preferences, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 15, 2024
Mr. Smith of Nebraska introduced the following bill; which was referred
to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To modify and reauthorize the Generalized System of Preferences, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Generalized System of Preferences
Reform Act''.
SEC. 2. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.
(a) In General.--Section 505 of the Trade Act of 1974 (19 U.S.C.
2465) is amended by striking ``December 31, 2020'' and inserting
``December 31, 2030''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
apply to articles entered on or after the 30th day after the
date of the enactment of this Act.
(2) Retroactive application for certain liquidations and
reliquidations.--
(A) In general.--Notwithstanding section 514 of the
Tariff Act of 1930 (19 U.S.C. 1514) or any other
provision of law and subject to subparagraph (B), any
entry of a covered article to which duty-free treatment
or other preferential treatment under title V of the
Trade Act of 1974 (19 U.S.C. 2461 et seq.) would have
applied if the entry had been made on December 31,
2020, that was made--
(i) after December 31, 2020, and
(ii) before the effective date specified in
paragraph (1),
shall be liquidated or reliquidated as though such
entry occurred on the effective date specified in
paragraph (1).
(B) Requests.--A liquidation or reliquidation may
be made under subparagraph (A) with respect to an entry
only if a request therefor is filed with U.S. Customs
and Border Protection not later than 180 days after the
date of the enactment of this Act that contains
sufficient information to enable U.S. Customs and
Border Protection--
(i) to locate the entry; or
(ii) to reconstruct the entry if it cannot
be located.
(C) Payment of amounts owed.--Any amounts owed by
the United States pursuant to the liquidation or
reliquidation of an entry of a covered article under
subparagraph (A) shall be paid, without interest of any
kind, not later than 90 days after the date of the
liquidation or reliquidation (as the case may be).
(3) Definitions.--In this subsection:
(A) Covered article.--The term ``covered article''
means an article from a country that is a beneficiary
developing country under title V of the Trade Act of
1974 (19 U.S.C. 2461 et seq.) as of the effective date
specified in paragraph (1).
(B) Enter; entry.--The terms ``enter'' and
``entry'' include a withdrawal from warehouse for
consumption.
SEC. 3. MODIFICATIONS TO DESIGNATIONS OF BENEFICIARY COUNTRIES.
Section 502 of the Trade Act of 1974 (19 U.S.C. 2462) is amended as
follows:
(1) In subsection (b)(1), by adding at the end the
following new subparagraph:
``(J) China.''.
(2) In subsection (b)(2)--
(A) by inserting after subparagraph (H) the
following:
``(I) Such country engages in gross violations of
internationally recognized human rights in that country
(including any designated zone in that country).''; and
(B) in the text following subparagraph (I) (as
inserted by subparagraph (A)), by striking ``and (H)
(to the extent described in section 507(6)(D))'' and
inserting ``(H) (to the extent described in section
507(6)(D)) and (I)''.
(3) In subsection (c)--
(A) in paragraph (6)(B), by striking ``; and'' and
inserting a semicolon;
(B) in paragraph (7), by striking the period at the
end and inserting a semicolon; and
(C) by adding at the end the following new
paragraphs:
``(8) the extent to which such country allows, after the
date of the enactment of this paragraph, construction of
military bases by a covered nation (as such term is defined in
section 4872 of title 10, United States Code);
``(9) the extent to which such country--
``(A) provides open and equitable market access for
United States agriculture, including through the
adoption of science-based standards;
``(B) refrains from imposing unjustified trade
restrictions that affect new agricultural technologies,
including biotechnology;
``(C) refrains from providing domestic agricultural
subsidies that decrease market opportunities for United
States exports; and
``(D) refrains from imposing prohibitions on the
generic use of common food and beverage terms;
``(10) the extent to which such country is deepening its
economic, diplomatic, and military relations with covered
nations (as such term is defined in section 4872 of title 10,
United States Code);
``(11) the extent to which such country has established, or
is making continual progress toward establishing--
``(A) the rule of law, political pluralism, and the
right to due process, a fair trial, and equal
protection under the law;
``(B) economic policies to reduce poverty, increase
the availability of health care and educational
opportunities, expand physical infrastructure, promote
the development of private enterprise, and encourage
the formation of capital markets through micro-credit
or other programs; and
``(C) a system to combat corruption and bribery,
such as signing and implementing the Convention on
Combating Bribery of Foreign Public Officials in
International Business Transactions, done at Paris
December 17, 1997, and entered into force February 15,
1999 (TIAS 99-215);
``(12) the extent to which such country provides equitable
and non-discriminatory tax treatment for United States
entities;
``(13) whether such country engages in activities that
undermine United States national security or foreign policy
interests; and
``(14) the extent to which such country--
``(A) has imposed unreasonable digital trade
barriers, such as unnecessary or discriminatory data
localization or data transfer restrictions,
discriminatory treatment of digital products, or forced
disclosure of proprietary source code; and
``(B) has taken steps in the digital environment to
support consumer protections, the privacy of personal
information, and open digital ecosystems;''.
SEC. 4. MODIFICATION OF PROVISIONS RELATING TO WITHDRAWAL, SUSPENSION,
OR LIMITATION OF COUNTRY DESIGNATION.
Section 502(d)(1) of the Trade Act of 1974 (19 U.S.C. (2462(d)(1))
is amended--
(1) by striking ``the President shall consider the
factors'' and inserting ``the President--
``(A) shall consider--
``(i) the factors'';
(2) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following:
``(ii) the likely impacts of any such
action on working toward, or continuing to
meet, the criteria and factors described in
subsections (b) and (c) of this section; and
``(iii) the likely impacts of any such
action on workers and populations in the
country that such criteria and factors are
intended to help;
``(B) take all available steps to facilitate
continued duty-free treatment under this title for
products with respect to which the imposition of duties
is likely--
``(i) to have an adverse effect on meeting
the criteria and factors described in
subsections (b) and (c) of this section; or
``(ii) result in severe economic harm to
the populations that such criteria and factors
are intended to help; and''.
SEC. 5. PROCEDURAL ENFORCEMENT REFORMS.
Section 502 of the Trade Act of 1974 (19 U.S.C. 2462), as amended
by sections 3 and 4, is further amended as follows:
(1) In subsection (d)(1), by adding at the end the
following:
``(C) hold a public hearing or provide for a period
of not less than 30 days for submission of comments by
the public.''.
(2) In subsection (f)(2)--
(A) in the paragraph heading, by inserting ``or
suspension'' after ``termination''.;
(B) by inserting ``or suspend'' after ``terminate''
each place it appears; and
(C) by inserting ``or suspension'' after
``termination''.
(3) By adding at the end the following:
``(g) Publication of Determinations Relating to Petitions for
Review.--The United States Trade Representative shall publish in the
Federal Register a notice of, and the rationale for, any determination
of the Trade Representative with respect to a petition for review of
the eligibility of a country for designation as a beneficiary
developing country, including a determination--
``(1) to accept or deny such a petition;
``(2) to continue to review the eligibility of the country;
or
``(3) to withdraw, suspend, or limit the application of
duty-free treatment under this title with respect to the
country.''.
SEC. 6. ASSESSMENT AND REPORT ON COMPLIANCE WITH ELIGIBILITY
REQUIREMENTS.
Section 502 of the Trade Act of 1974, as amended by sections 3
through 5, is further amended by adding at the end the following:
``(h) Assessment and Report on Compliance With Eligibility
Requirements.--
``(1) In general.--The President shall--
``(A) on an annual basis--
``(i) conduct assessments of the compliance
of an appropriate number of countries
designated as beneficiary developing countries
for purposes of this title in meeting or
continuing to meet the eligibility requirements
under this title; and
``(ii) make determinations with respect to
whether to initiate full reviews of the
practices of those countries to assess the
continued eligibility of those countries for
designation as beneficiary developing countries
under this title; and
``(B) submit to Congress a report consisting of the
results of such assessments and determinations.
``(2) Frequency.--The President shall conduct an assessment
described in clause (i) of paragraph (1)(A) and make a
determination described in clause (ii) of that paragraph with
respect to each country designated as a beneficiary developing
country for purposes of this title not less frequently than
once every 3 years.''.
SEC. 7. MODIFICATIONS TO RULES OF ORIGIN.
(a) In General.--Section 503(a)(2) of the Trade Act of 1974 (19
U.S.C. 2463(a)(2)) is amended--
(1) in subparagraph (A), in the matter following clause
(ii)(II), by striking ``35 percent'' and inserting ``the
percentage described in subparagraph (B)'';
(2) by redesignating subparagraph (B) as subparagraph (C);
(3) by inserting after subparagraph (A) the following:
``(B) Percentage described.--The percentage
described in this subparagraph is--
``(i) in the case of articles entered
before January 1, 2027, 35 percent;
``(ii) in the case of articles entered on
or after January 1, 2027, and before January 1,
2029, 40 percent;
``(iii) in the case of articles entered on
or after January 1, 2029, and before January 1,
2031, 45 percent; and
``(iv) in the case of articles entered on
or after January 1, 2031, 50 percent.''; and
(4) by adding at the end the following:
``(D) Pass-through and cost or value of materials
produced in the customs territory of the united
states.--
``(i) In general.--The duty-free treatment
provided under this title shall apply to any
article that meets the requirements of this
paragraph.
``(ii) Exception with respect to materials
produced in the customs territory of the united
states.--To the extent that the cost or value
of materials produced in the customs territory
of the United States is included with respect
to an article, an amount not to exceed 15
percent of the appraised value of the article
at the time it is entered that is attributed to
such United States cost or value may be applied
toward determining the applicable percentage
described in subparagraph (B).
``(iii) No pass-through to other
programs.--Notwithstanding clause (i), duty-
free treatment under any other program
providing such treatment for an article,
conditional on the eligibility of an article to
be treated as originating for purposes of this
paragraph, may only be extended to an article
that is otherwise eligible for duty-free
treatment under this title in a calendar year--
``(I) if the article would remain
eligible for such treatment even if
subparagraph (A) were applied by
substituting `35 percent' for `the
percentage described in subparagraph
(B)' with respect to that calendar
year; and
``(II) if no amount attributable to
United States cost or value, as
authorized by clause (ii) of this
subparagraph, would be required to be
applied in order to achieve such
eligibility.''.
(b) Report.--
(1) In general.--Not later than January 1, 2026, the United
States Trade Representative shall submit to Congress a report
on the impact of the Generalized System of Preferences rule of
origin requirements under section 503(a)(2)(A)(ii)(I) of the
Trade Act of 1974 (19 U.S.C. 2463(a)(2)(A)(ii)(I)) in fostering
regional economic integration through program cumulation among
regional associations.
(2) Matters to be included.--The report required under this
subsection shall include recommendations regarding--
(A) new regional associations eligible for
treatment as one country under the provisions of
section 507(2) of the Trade Act of 1974 (19 U.S.C.
2467(2)); and
(B) updates to the rule of origin methodology under
section 503 of such Act that would better maximize
content from beneficiary developing countries and the
United States.
SEC. 8. MODIFICATIONS TO COMPETITIVE NEED LIMITATION.
(a) In General.--Section 503 of the Trade Act of 1974 (19 U.S.C.
2463) is amended--
(1) in subsection (c)(2)--
(A) in subparagraph (A)(ii)--
(i) in subclause (I), by striking ``for
1996, $75,000,000'' and inserting ``for
calendar year 2023, $500,000,000''; and
(ii) in subclause (II), by striking
``$5,000,000'' and inserting ``2.5 percent of
such applicable amount'';
(B) in subparagraph (C), by striking ``may,
subject'' and inserting ``should, subject''; and
(C) in subparagraph (F)(ii)--
(i) in subclause (I), by striking ``for
calendar year 1996, $13,000,000'' and inserting
``for calendar year 2023, $50,000,000''; and
(ii) in subclause (II), by striking
``$500,000'' and inserting ``2.5 percent of
such applicable amount'';
(2) in subsection (d)(4)(B), by adding at the end the
following:
``(iii) Clause (ii)(II) shall not apply with
respect to any article if a like or directly
competitive article was not produced in the United
States in any of the preceding 3 calendar years.''.
(b) Applicability.--
(1) In general.--The amendments made by subsection (a)
shall take effect on the date of the enactment of this Act.
(2) Restoration of duty-free treatment.--
(A) List required.--Not later than 120 days after
the date of the enactment of this Act, the President
shall--
(i) list each article with respect to which
duty-free treatment was eliminated (as of the
date of the enactment of this Act) pursuant to
subsection (c) of section 503 of the Trade Act
of 1974 that is eligible for such treatment
pursuant to such section 503 as amended by
subsection (a) of this section; and
(ii) determine, with respect to each such
article, whether the article is a potentially
sensitive product that warrants review pursuant
to subsection (c)(1) of such section 503 for
the continued withholding of duty-free
treatment.
(B) Prompt restoration.--Except for articles for
which the President makes an affirmative determination
pursuant to subparagraph (A)(ii), the President shall
restore duty-free treatment to each article included in
the list described in subparagraph (A)(i) on such 120th
day after date of enactment.
(3) Expedited review of certain articles for exclusion from
duty-free treatment.--The President shall review, pursuant to
section 503(c)(1) of the Trade Act of 1974 (19 U.S.C.
2463(c)(1)), whether duty-free treatment should continue to be
withheld from each article for which the President makes an
affirmative determination pursuant to paragraph (2)(A)(ii). Not
later than 1 year after the date of the enactment of this Act,
the President shall restore duty-free treatment to each article
for which such review determines that such treatment should not
be withheld.
(4) Reports.--Not later than 1 year after the date of the
enactment of this Act, the President shall submit to the
Committee on Ways and Means of the House of Representatives and
the Committee on Finance of the Senate a report containing--
(A) the results of the reviews conducted pursuant
to paragraph (3); and
(B) justifications for the reasons for which duty-
free treatment was withheld or restored with respect to
articles described in such paragraph.
SEC. 9. EXPEDITED PRODUCT COVERAGE PETITION PROCESS.
(a) In General.--Not later than 90 days after the date of the
enactment of this Act, the United States International Trade Commission
shall publish in the Federal Register and on a publicly available
internet website of the Commission a notice requesting interested
parties to submit to the Commission, during the 60-day period beginning
on the date of such publication, a petition--
(1) to add one or more headings or subheadings of the
Harmonized Tariff Schedule of the United States to, or remove
one or more such headings or subheadings from, the list of
articles that may not be designated as an eligible article for
duty-free treatment pursuant to section 503(b) of the Trade Act
of 1974 (19 U.S.C. 2463(b)); or
(2) to provide duty-free treatment to one or more headings
or subheadings of the Harmonized Tariff Schedule under the
Generalized System of Preferences that are--
(A) not restricted under such section 503(b) from
designation as an eligible article; and
(B) not otherwise designated an eligible article by
the President pursuant to section 501 or section 503(a)
of such Act (19 U.S.C. 2461; 2463(a)).
(b) Contents of Petition.--A petition submitted pursuant to
subsection (a) shall be eligible for consideration under the process
provided by this section only if such petition includes--
(1) the name and address of the petitioner;
(2) the 8-digit subheading level or levels under the
Harmonized Tariff Schedule with respect to which the petition
is submitted; and
(3) for a petition submitted pursuant to subsection (a), a
certification that the petitioner is an interested party and a
brief description of the manner and extent to which the
petitioner is a likely beneficiary with respect to the addition
or removal of the heading or subheading level concerned.
(c) Publication of Petitions.--As soon as practicable after the 60-
day period described in subsection (a), and not later than 30 days
after the end of such period, the Commission shall publish on a
publicly available internet website of the Commission the contents of
each petition received.
(d) Opportunity for Public Comment.--During the 45-day period
beginning on the date of the publication of petitions pursuant to
subsection (c), the Commission shall publish in the Federal Register
and on a publicly available internet website of the Commission a notice
requesting members of the public to submit comments to the Commission
with respect to the changes sought by the petitions.
(e) Report.--Not later than 1 year after the date of the enactment
of this Act, the Commission shall submit to the appropriate
congressional committees a report on each eligible petition submitted
pursuant to the process provided by this section that includes, with
respect to the article or articles concerned in each such petition--
(1) data from the 5 most recent calendar years for which
complete information is available on--
(A) sources of imports;
(B) values of imports;
(C) market share of imports (to the extent
practical); and
(D) domestic production (to the extent practical);
(2) any information on whether the product is used as an
input in United States manufacturing; and
(3) a summary of information provided in the form of
comments rebutting or objecting to the petition.
(f) Authorities.--
(1) Procedures.--The Commission shall prescribe and publish
in the Federal Register and on a publicly available internet
website of the Commission all procedures to be complied with by
members of the public submitting petitions.
(2) Judicial review precluded.--The exercise of functions
under this section shall not be subject to judicial review.
(g) Interested Party Defined.--In this section, the term
``interested party'' has the definition given such term in section 771
of the Tariff Act of 1930 (19 U.S.C. 1677), except that an interested
party under this section may not include--
(1) any person described in paragraph (9)(A) of such
section, other than a person that is an importer or a business
association of importers; or
(2) any person described in paragraph (9)(B) or (9)(G) of
such section.
SEC. 10. EXTENSION OF CUSTOMS USER FEES.
(a) In General.--Section 13031(j)(3) of the Consolidated Omnibus
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended--
(1) in subparagraph (A), by striking ``September 30, 2031''
and inserting ``September 30, 2033''; and
(2) in subparagraph (B)(i), by striking ``September 30,
2031'' and inserting ``September 30, 2033''.
(b) Rate for Merchandise Processing Fees.--Section 503 of the
United States-Korea Free Trade Agreement Implementation Act (Public Law
112-41; 19 U.S.C. 3805 note) is amended by striking ``September 30,
2031'' and inserting ``September 30, 2033''.
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