Tariff Modifications: Miscellaneous Tariff Bills

Vivian C. Jones
Specialist in International Trade and Finance

Importers often request that members of Congress introduce bills seeking to suspend or reduce tariffs on certain imports on their behalf. The vast majority of these commodities are chemicals, raw materials, or other components used as inputs in the manufacturing process. The rationale for these requests, in general, is that they help domestic producers of the downstream goods reduce costs, thus making their products more competitive. In turn, these cost reductions can be passed on to the consumer.

In recent congressional practice, the House Ways and Means and Senate Finance Committees, the committees of jurisdiction over tariffs, have combined individual duty suspension bills and other technical trade provisions into larger pieces of legislation known as miscellaneous tariff bills (MTBs). Before inclusion in an MTB, the individual legislative proposals introduced by Members are reviewed by the trade subcommittee staff in each committee, the U.S. International Trade Commission (USITC), and several executive branch agencies to ensure that they are noncontroversial (generally, that no domestic producer objects) and relatively revenue-neutral (revenue loss of no more than $500,000 per item).

In the 111th Congress, the United States Manufacturing Enhancement Act of 2010 (P.L. 111-227) was signed by the President on August 11, 2010. As enacted, the law temporarily suspended or reduced for three years (through December 31, 2012) duties on over 600 products, many of which renewed duty suspensions or reductions that were already in place. On December 15, 2010, H.R. 6517, a bill that, in part, sought further duty suspensions on approximately 290 products, passed in the House. On December 22, 2010, however, the Senate passed an amendment in the nature of a substitute of H.R. 6517 that did not contain the duty suspension measures. The House passed the amended version of the bill on the same date (P.L. 111-344).

Legislation could emerge in the second session of the 112th Congress proposing the duty suspensions originally included in H.R. 6517 and other duty suspensions. However, some in Congress assert that duty suspensions, also referred to in legislation as “limited tariff benefits” are similar to earmarks—and should, therefore, be subject to the non-binding moratorium on earmarks supported by House and Senate Republicans last year.

Nonetheless, on December 13, 2011, House Ways and Means Trade Subcommittee Chairman Kevin Brady announced that he is working toward advancing an MTB in the second session of the 112th Congress, by “seeking a process to assure Members in the House and particularly the Senate that this [MTB] bill is job-creating, that the process is transparent.”

This report, first, briefly presents a discussion of the MTB legislation debated in the past few congresses. Second, the review of individual duty suspension bills by House Ways and Means and Senate Finance committee staff, the U.S. International Trade Commission (USITC), and other relevant agencies are discussed. Third, the report presents the pros and cons for MTB passage. Fourth, a table at the end of the report illustrates MTB legislation considered in Congress from the 97th Congress (1983) to the present.


Date of Report: December 29, 2011
Number of Pages: 15
Order Number: RL33867
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

Generalized System of Preferences: Background and Renewal Debate

Vivian C. Jones
Specialist in International Trade and Finance

The U.S. Generalized System of Preferences (GSP) program provides non-reciprocal, duty-free tariff treatment to certain products imported from designated beneficiary developing countries (BDCs). The United States, the European Union, and other developed countries have implemented similar programs since the 1970s in order to promote economic growth in developing countries by stimulating their exports. The U.S. program was first authorized in Title V of the Trade Act of 1974, and was most recently extended until July 31, 2013, in Section 1 of P.L. 112-40. The President signed the legislation enacting the GSP on October 21, 2011, and GSP trade benefits became effective 15 days after that date, or on November 5, 2011. The GSP program was also retroactively extended to eligible merchandise that entered the United States between the expiration date, December 31, 2010, and the date that the GSP renewal entered into force. Therefore, importers of GSP-eligible products may seek reimbursement for tariffs paid during the lapse of GSP coverage.

The GSP is one of several trade preference programs that provide similar trade benefits to goods from developing and least-developed beneficiary countries. Other U.S. trade preference programs include the African Growth and Opportunity Act (AGOA), the Andean Trade Preference Act (ATPA), and the Caribbean Basin Initiative (CBI).

The GSP program, as well as other trade preference programs, was established based on an economic theory that preferential tariff rates in developed country markets could promote exportdriven industry growth in developing countries. It was believed that this, in turn, would help to free beneficiaries from heavy dependence on trade in primary products, whose slow long-term growth and price instability contributed to chronic trade deficits. In 2010, the GSP provided preferential duty-free entry for about 3,400 products from 129 designated beneficiaries, and an additional 1,400 products from those beneficiaries designated as least-developed beneficiary developing countries.

In recent years, renewal of trade preferences programs in general, and of the GSP program in particular, has been somewhat controversial in Congress. Some members have expressed the view that some of the more advanced BDCs, such as Brazil and India, continue to receive benefits even while they actively contribute to the impasse in multilateral World Trade Organization (WTO) Doha Development Agenda (DDA) talks. Some members have also questioned whether more “advanced” developing countries should be receiving benefits under unilateral preference programs at all, and propose ending or limiting their benefits in favor of providing a greater share of benefits to least-developed countries (LDCs). Other members have proposed granting dutyfree, quota-free access (DFQF) to developing countries under the African Growth and Opportunity Act (who are also GSP beneficiaries), which could potentially also be extended to other GSP countries.

This report presents, first, a brief history, economic rationale, and legal background leading to the establishment of the GSP. A brief comparison of GSP programs worldwide, especially as they compare to the U.S. system, is also presented. Second, the report presents a discussion of U.S. implementation of the GSP, along with the present debate surrounding its renewal and legislative developments to date. Third, an analysis of the U.S. program’s effectiveness and the positions of various stakeholders is presented. Fourth, implications of the expiration of the U.S. program and possible options for Congress are discussed.


Date of Report: December 29, 2011
Number of Pages: 39
Order Number: RL33663
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

The Jackson-Vanik Amendment and Candidate Countries for WTO Accession: Issues for Congress

William H. Cooper
Specialist in International Trade and Finance

Unconditional most-favored-nation (MFN) status, or in U.S. statutory parlance, normal trade relations (NTR) status, is a fundamental principle of the World Trade Organization (WTO). Under this principle, WTO members are required unconditionally to treat imports of goods and services from any WTO member no less favorably than they treat the imports of like goods and services from any other WTO member country. Under Title IV of the Trade Act of 1974, as amended, most communist or nonmarket-economy countries were denied MFN status unless they fulfilled freedom of emigration conditions as contained in Section 402, the so-called Jackson-Vanik amendment, or were granted a presidential waiver of the conditions, subject to congressional disapproval. The statute still applies to many of these countries, even though most have replaced their communist governments. The majority of these countries have joined the WTO or are candidates for accession. Several countries are close to completing the accession process, and Congress could soon face the issue of what to do about their NTR status to ensure that the United States benefits from those accession agreements. During the 112th Congress, Members may face the issue of whether to extend PNTR to Russia or to other countries acceding to the WTO.


Date of Report: December 20, 2011
Number of Pages: 8
Order Number: RS22398
Price: $19.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

EU-U.S. Economic Ties: Framework, Scope, and Magnitude

William H. Cooper
Specialist in International Trade and Finance

The United States and the European Union (EU) economic relationship is the largest in the world—and it is growing. The modern U.S.-European economic relationship has evolved since World War II, broadening as the six-member European Community expanded into the present 27- member European Union. The ties have also become more complex and interdependent, covering a growing number and type of trade and financial activities.

In 2010, $1,537.4 billion flowed between the United States and the EU on the current account, the most comprehensive measure of U.S. trade flows. The EU as a unit is the largest merchandise trading partner of the United States. In 2010, the EU accounted for $239.7 billion of total U.S. exports (or 18.7%) and for $319.2 billion of total U.S. imports (or 18.1%) for a U.S. trade deficit of $73.2 billion. The EU is also the largest U.S. trade partner when trade in services is added to trade in merchandise, accounting for $170.2 billion (or 31.0% of the total in U.S. services exports) and $138.5 billion (or 34.4% of total U.S. services imports) in 2010. In addition, in 2010, a net $168.1 billion flowed from U.S. residents to EU countries into direct investments, while a net $131.9 billion flowed from EU residents to direct investments in the United States.

Policy disputes arise between the United States and the EU, generating tensions which sometimes lead to bilateral trade disputes. Yet, in spite of these disputes, the U.S.-EU economic relationship remains dynamic. It is a relationship that is likely to grow in importance assuming the trends toward globalization and the enlargement of the EU continue, forcing more trade and investment barriers to fall. Economists indicate that an expanded relationship would bring economic benefits to both sides in the form of wider choices of goods and services and greater investment opportunities.

But increasing economic interdependence brings challenges as well as benefits. As the U.S. and EU economies continue to integrate, some sectors or firms will “lose out” to increased competition and will resist the forces of change. Greater economic integration also challenges long-held notions of “sovereignty,” as national or regional policies have extraterritorial impact. Similarly, accepted understandings of “competition,” “markets,” and other economic concepts are tested as national borders dissolve with closer integration of economies.

U.S. and EU policymakers are likely to face the task of how to manage the increasingly complex bilateral economic relationship in ways that maximize benefits and keep frictions to a minimum, including developing new frameworks. For Members during the 112th Congress, it could mean weighing the benefits of greater economic integration against the costs to constituents in the context of overall U.S. national interests.


Date of Report: December 21, 2011
Number of Pages: 11
Order Number: RL30608
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.

Multilateral Development Banks: U.S. Contributions FY2000-FY2011

Rebecca M. Nelson
Analyst in International Trade and Finance

This report shows in tabular form how much the Administration requested and how much Congress appropriated for U.S. payments to the multilateral development banks (MDBs) since 2000. It also provides a brief description of the MDBs and the ways they fund their operations. It will be updated periodically as annual appropriation figures are known. The title of this report will also change annually, as new yearly appropriation figures are added.

Of note in FY2012, the Administration requested and Congress appropriated funds for several of the non-concessional lending facilities at the MDBs. Several of the MDBs are in the process of increasing the size of their non-concessional lending facilities, a process frequently called a “general capital increase” (GCI). GCIs are relatively unusual, particularly for so many institutions at the same time. Contributions to the CGIs are expected to be spread out over a five- to eightyear period, depending on the institution. For most of the institutions, the FY2012 funds are the first annual payment. In FY2012, Congress also appropriated funds for several MDB concessional lending facilities and more targeted MDB funds, such as those dedicated to environmental issues.

For further information about the MDBs, the GCIs, and relevant U.S. policy process, see:

•       CRS Report R41170, Multilateral Development Banks: Overview and Issues for Congress, by Rebecca M. Nelson; 

•       CRS Report R41672, Multilateral Development Banks: General Capital Increases, by Martin A. Weiss; and 

•       CRS Report R41537, Multilateral Development Banks: How the United States Makes and Implements Policy, by Jonathan E. Sanford.

Date of Report: December 28, 2011
Number of Pages: 12
Order Number: RS20792
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.