As the House of Representatives approved a one-year extension of two preferential trade programs -- and the Senate is expected to do the same later this week -- Congress has postponed action on some of the controversial issues surrounding the programs.

The House-approved legislation is a simple one-year extension of the current General System of Preferences (GSP) and the Andean Trade Preference Act. US textile and apparel manufacturers and importers had sought a longer extension that they believe would facilitate longer-term sourcing and remove some of the uncertainties from the marketplace.

Textile manufacturers were concerned about an effort to grant zero-tariffs to textiles and apparel from Cambodia and Bangladesh and the possibility that textiles and apparel would for the first time be subject to GSP duty-free treatment. Importers were recommending a single rule of origin for all products that would undercut the textile industry's hard-won yarn forward rule of origin that is part of key bilateral and regional free trade agreements.

While neither textile manufacturers nor importers are entirely pleased with the one-year extension, they say it is better than letting the preference programs expire December 31 as scheduled. They expect the larger issues to be addressed next year as part of a more comprehensive legislative package dealing with a wide range of trade issues.

December 15, 2009