A Coach backpack.

WASHINGTON  A bipartisan group of senators sent a letter to U.S. Trade Representative Michael Froman on Tuesday urging the agency to further expand trade benefits for imported travel goods to more countries.

The Obama administration issued a decision in late June expanding duty-free benefits for imported travel goods under the Generalized System of Preferences 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.

The decision disappointed industry groups like the American Apparel & Footwear Association and fashion firms like Tory Burch, Michael Kors and Coach Inc. that were seeking to have the benefits extended to a larger group of countries.

In August, USTR opened a new comment period and said it would further review trade benefits for imported travel goods from the several countries that were excluded.

Several company executives, industry associations and foreign government officials reiterated their case for a further expansion of GSP trade benefits to “all beneficiary countries” at a USTR hearing on Tuesday. One company, Korchmar, a travel goods manufacturer based in Florida, testified that there is a U.S. industry for travel goods that would be harmed if duties are removed from more GSP countries, according to prepared testimony.

The group of senators, including Senate Finance Committee chairman Orrin Hatch (R., Utah), followed up with its letter to Froman, increasing the pressure on the administration to issue a new decision to include more GSP-eligible countries.

The bipartisan group of senators on the committee said the administration’s initial decision was “disappointing for several reasons.” They argued that it did not “comport with the expansion of duty-free treatment that Congress envisioned” when it passed a bill authorizing the president to include travel goods in the program for “all GSP beneficiaries.”

The senators also questioned the administration’s “soundness” of the initial decision and how it arrived at a decision to limit the duty-free benefits to just least-developed beneficiary developing countries and eligible sub-Saharan African countries.

“Third, the decision unnecessarily perplexed and understandably frustrated U.S. businesses and consumers,” the senators said. “Through multiple hearing testimonies and written submissions, many stakeholders expressed support for extending eligibility for duty-free treatment to imports form all GSP beneficiaries.”

They said the administration’s apparent deferral of a decision on those countries that were excluded was open ended.

“Businesses have difficulty planning investing and making other meaningful commercial decisions amidst this uncertainty,” the senators wrote.

In response to the letter a USTR spokeswoman said: “USTR held a public hearing yesterday, which drew submissions and testimony from a wide range of U.S. and international businesses and trade associations professionally involved in producing and sourcing travel goods, as well as seven GSP beneficiary country governments at differing levels of development.”

“USTR has also established a supplemental comment period as part of a formal process to collect additional information relevant to the question of further extending duty-free treatment of travel goods under the GSP program,” she said, adding the trade agency welcomes the feedback from lawmakers, importers, producers and foreign governments.

 

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