A Coach travel bag.

WASHINGTON — The U.S. Trade Representative’s office is set to announce it will open a new comment period and further review trade benefits for imported travel goods from several countries that were not included in a decision it made in late June.

The expected move to review additional countries for duty-free benefits was immediately lauded by the American Apparel & Footwear Association, which had joined with a coalition of other groups and companies to press the Obama administration to extend the duty benefits to more countries.

In late June, the administration issued a decision expanding duty-free benefits for imported travel goods under the Generalized System of Preferences program to a limited group of the poorest countries in the world.

The decision gave African countries under the African Growth and Opportunity Act and other countries such as Cambodia and Haiti the ability under GSP to ship luggage, backpacks, handbags and wallets, among other travel goods, to the U.S. duty-free.

But the administration declined to include countries such as the Philippines, Thailand, Pakistan, Indonesia and Sri Lanka, which all have some travel goods production.

That disappointed U.S. industry groups representing brands and retailers who were seeking benefits for those countries.

Now, USTR is signaling its intent to consider additional countries. In an advance Federal Register notice set to be published Thursday, the agency said it will hold a supplemental comment period and convene a new hearing in the matter. It said it plans to “receive additional information and stakeholder views regarding the potential addition of travel and luggage goods products for more economically advanced GSP [Generalized System of Preferences] beneficiary countries.”

“We are thrilled with [the] announcement from the USTR, because it sets forth a clear process and a definitive timeline for a final decision,” said Rick Helfenbein, president and chief executive officer of the AAFA.

“While the June 30 proclamation did provide duty-free treatment for travel goods from ‘least-developed beneficiary countries’ and AGOA [the African Growth and Opportunity Act], we strongly felt that it did not live up to the expectation of the original legislative effort,” he added. “Today’s decision opens the opportunity to revisit those countries that were left out, furthering their economic development without harming the competitiveness of the countries that were already approved for travel goods.”

The advance federal notice outlining USTR’s intent is listed on a “public inspection site” and was circulated by the AAFA on Wednesday.  The notice states that an interagency GSP panel is slated to hold a new hearing on travel and luggage goods on Oct. 18.

Companies such as Coach Inc., Michael Kors, Tory Burch, VF Corp., Kate Spade, Ann Inc., REI and Columbia Sportswear petitioned the government either individually or as part of coalitions for duty-free benefits on an array of travel goods under GSP.

The GSP program provides duty-free benefits for more than 5,000 types of products from 122 designated countries and territories. While the entire GSP program does not cover most apparel and textile imports to the U.S., it does cover accessories, such as jewelry.

Congress passed legislation last year that removed a 41-year-old statutory prohibition on travel goods under the GSP program that then allowed companies to petition the government to include imports of certain travel goods for duty-free treatment.

The estimated amount of U.S. imports of the travel goods covered by the 20 petitions was $9.54 billion in 2014, according to four petitions filed on behalf of several brands and retailers by Sorini, Samet & Associates LLC. Of that total, China accounted for roughly $6.73 billion in travel goods imports to the U.S. China is not eligible for GSP benefits.

In its review, the administration weighed, among other things, the impact of lifting duties on imports on U.S. travel goods manufacturers against the benefits to U.S. companies that source the majority of those products abroad and to developing countries seeking to expand their market share in the categories.

 

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