US apparel body wants swift passage of GSP Refund Only Bill

The American Apparel & Footwear Association (AAFA) has called on the US Congress to swiftly pass the GSP Refund Only Bill citing that the supply chain hurdles caused by the expiration of the GSP facility were hampering business operations.

The association expressed its support for the bill which was introduced in the House of Representatives on 19 September. 

If the bill is passed, American companies would get a refund of more than $700 million in tariffs they paid for importing products including luggage, handbags, backpacks, cases, wallets, and more. 

The Congressional authorisation of the Generalized System of Preferences (GSP) expired on 31 December in 2020. 

AAFA President and Chief Executive Officer Steve Lamar said, "The apparel and footwear industry encourages Congress to quickly pass the bill to support American companies that are committed to the values of the Generalised System of Preferences programme, and to help mitigate the costs faced by our nation's supply chains". 

He said the past few years have seen continuing disruption to supply chains, most recently the threat of work stoppages at America's ports and along the rail lines. 

"Refunding tariff costs on products that should already be duty free allows our members to focus their attention on these supply chain issues and enables companies to keep workers employed. 

"While the long-term renewal of the GSP programme is still a top priority, this bill would provide companies with stop-gap relief as they continue to support the American economy," he added.  

The GSP is the largest and oldest US trade preference programme. It is designed to support economic development in select developing countries by removing tariff barriers on qualifying products while supporting worker rights, intellectual property protection, and the rule of law in these beneficiary countries. 

Bangladesh had been enjoying the GSP facility for a few items, excluding apparel, until the 2013 Rana Plaza collapse. After the deadly industrial accident, the US government suspended the facility for Bangladesh on June 27 that year. 

Western buyers formed Accord and Alliance to improve workplace safety in the Bangladeshi readymade garment factories after the incident. The two bodies implemented a set of measures, which improved workplace safety and environment. 

Bangladesh now has 173 green factories certified by the US Green Building Council, which is the highest for any nation in the world. Another more than 500 are waiting for certification.  

The US is currently Bangladesh's largest single country export destination, with goods worth $10.42 billion exported in FY22.

Bangladesh in the past had requested the US authorities several times to restore GSP. It will do so again in the upcoming meeting of the Trade and Investment Cooperation Forum Agreement (TICFA) to be held in Washington in the first week of December.