[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7986 Introduced in House (IH)]

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118th CONGRESS
  2d Session
                                H. R. 7986

 To modify and reauthorize the Generalized System of Preferences, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 15, 2024

Mr. Smith of Nebraska introduced the following bill; which was referred 
                   to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To modify and reauthorize the Generalized System of Preferences, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Generalized System of Preferences 
Reform Act''.

SEC. 2. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.

    (a) In General.--Section 505 of the Trade Act of 1974 (19 U.S.C. 
2465) is amended by striking ``December 31, 2020'' and inserting 
``December 31, 2030''.
    (b) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to articles entered on or after the 30th day after the 
        date of the enactment of this Act.
            (2) Retroactive application for certain liquidations and 
        reliquidations.--
                    (A) In general.--Notwithstanding section 514 of the 
                Tariff Act of 1930 (19 U.S.C. 1514) or any other 
                provision of law and subject to subparagraph (B), any 
                entry of a covered article to which duty-free treatment 
                or other preferential treatment under title V of the 
                Trade Act of 1974 (19 U.S.C. 2461 et seq.) would have 
                applied if the entry had been made on December 31, 
                2020, that was made--
                            (i) after December 31, 2020, and
                            (ii) before the effective date specified in 
                        paragraph (1),
                shall be liquidated or reliquidated as though such 
                entry occurred on the effective date specified in 
                paragraph (1).
                    (B) Requests.--A liquidation or reliquidation may 
                be made under subparagraph (A) with respect to an entry 
                only if a request therefor is filed with U.S. Customs 
                and Border Protection not later than 180 days after the 
                date of the enactment of this Act that contains 
                sufficient information to enable U.S. Customs and 
                Border Protection--
                            (i) to locate the entry; or
                            (ii) to reconstruct the entry if it cannot 
                        be located.
                    (C) Payment of amounts owed.--Any amounts owed by 
                the United States pursuant to the liquidation or 
                reliquidation of an entry of a covered article under 
                subparagraph (A) shall be paid, without interest of any 
                kind, not later than 90 days after the date of the 
                liquidation or reliquidation (as the case may be).
            (3) Definitions.--In this subsection:
                    (A) Covered article.--The term ``covered article'' 
                means an article from a country that is a beneficiary 
                developing country under title V of the Trade Act of 
                1974 (19 U.S.C. 2461 et seq.) as of the effective date 
                specified in paragraph (1).
                    (B) Enter; entry.--The terms ``enter'' and 
                ``entry'' include a withdrawal from warehouse for 
                consumption.

SEC. 3. MODIFICATIONS TO DESIGNATIONS OF BENEFICIARY COUNTRIES.

    Section 502 of the Trade Act of 1974 (19 U.S.C. 2462) is amended as 
follows:
            (1) In subsection (b)(1), by adding at the end the 
        following new subparagraph:
                    ``(J) China.''.
            (2) In subsection (b)(2)--
                    (A) by inserting after subparagraph (H) the 
                following:
                    ``(I) Such country engages in gross violations of 
                internationally recognized human rights in that country 
                (including any designated zone in that country).''; and
                    (B) in the text following subparagraph (I) (as 
                inserted by subparagraph (A)), by striking ``and (H) 
                (to the extent described in section 507(6)(D))'' and 
                inserting ``(H) (to the extent described in section 
                507(6)(D)) and (I)''.
            (3) In subsection (c)--
                    (A) in paragraph (6)(B), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in paragraph (7), by striking the period at the 
                end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                paragraphs:
            ``(8) the extent to which such country allows, after the 
        date of the enactment of this paragraph, construction of 
        military bases by a covered nation (as such term is defined in 
        section 4872 of title 10, United States Code);
            ``(9) the extent to which such country--
                    ``(A) provides open and equitable market access for 
                United States agriculture, including through the 
                adoption of science-based standards;
                    ``(B) refrains from imposing unjustified trade 
                restrictions that affect new agricultural technologies, 
                including biotechnology;
                    ``(C) refrains from providing domestic agricultural 
                subsidies that decrease market opportunities for United 
                States exports; and
                    ``(D) refrains from imposing prohibitions on the 
                generic use of common food and beverage terms;
            ``(10) the extent to which such country is deepening its 
        economic, diplomatic, and military relations with covered 
        nations (as such term is defined in section 4872 of title 10, 
        United States Code);
            ``(11) the extent to which such country has established, or 
        is making continual progress toward establishing--
                    ``(A) the rule of law, political pluralism, and the 
                right to due process, a fair trial, and equal 
                protection under the law;
                    ``(B) economic policies to reduce poverty, increase 
                the availability of health care and educational 
                opportunities, expand physical infrastructure, promote 
                the development of private enterprise, and encourage 
                the formation of capital markets through micro-credit 
                or other programs; and
                    ``(C) a system to combat corruption and bribery, 
                such as signing and implementing the Convention on 
                Combating Bribery of Foreign Public Officials in 
                International Business Transactions, done at Paris 
                December 17, 1997, and entered into force February 15, 
                1999 (TIAS 99-215);
            ``(12) the extent to which such country provides equitable 
        and non-discriminatory tax treatment for United States 
        entities;
            ``(13) whether such country engages in activities that 
        undermine United States national security or foreign policy 
        interests; and
            ``(14) the extent to which such country--
                    ``(A) has imposed unreasonable digital trade 
                barriers, such as unnecessary or discriminatory data 
                localization or data transfer restrictions, 
                discriminatory treatment of digital products, or forced 
                disclosure of proprietary source code; and
                    ``(B) has taken steps in the digital environment to 
                support consumer protections, the privacy of personal 
                information, and open digital ecosystems;''.

SEC. 4. MODIFICATION OF PROVISIONS RELATING TO WITHDRAWAL, SUSPENSION, 
              OR LIMITATION OF COUNTRY DESIGNATION.

    Section 502(d)(1) of the Trade Act of 1974 (19 U.S.C. (2462(d)(1)) 
is amended--
            (1) by striking ``the President shall consider the 
        factors'' and inserting ``the President--
                    ``(A) shall consider--
                            ``(i) the factors'';
            (2) by striking the period at the end and inserting a 
        semicolon; and
            (3) by adding at the end the following:
                            ``(ii) the likely impacts of any such 
                        action on working toward, or continuing to 
                        meet, the criteria and factors described in 
                        subsections (b) and (c) of this section; and
                            ``(iii) the likely impacts of any such 
                        action on workers and populations in the 
                        country that such criteria and factors are 
                        intended to help;
                    ``(B) take all available steps to facilitate 
                continued duty-free treatment under this title for 
                products with respect to which the imposition of duties 
                is likely--
                            ``(i) to have an adverse effect on meeting 
                        the criteria and factors described in 
                        subsections (b) and (c) of this section; or
                            ``(ii) result in severe economic harm to 
                        the populations that such criteria and factors 
                        are intended to help; and''.

SEC. 5. PROCEDURAL ENFORCEMENT REFORMS.

    Section 502 of the Trade Act of 1974 (19 U.S.C. 2462), as amended 
by sections 3 and 4, is further amended as follows:
            (1) In subsection (d)(1), by adding at the end the 
        following:
                    ``(C) hold a public hearing or provide for a period 
                of not less than 30 days for submission of comments by 
                the public.''.
            (2) In subsection (f)(2)--
                    (A) in the paragraph heading, by inserting ``or 
                suspension'' after ``termination''.;
                    (B) by inserting ``or suspend'' after ``terminate'' 
                each place it appears; and
                    (C) by inserting ``or suspension'' after 
                ``termination''.
            (3) By adding at the end the following:
    ``(g) Publication of Determinations Relating to Petitions for 
Review.--The United States Trade Representative shall publish in the 
Federal Register a notice of, and the rationale for, any determination 
of the Trade Representative with respect to a petition for review of 
the eligibility of a country for designation as a beneficiary 
developing country, including a determination--
            ``(1) to accept or deny such a petition;
            ``(2) to continue to review the eligibility of the country; 
        or
            ``(3) to withdraw, suspend, or limit the application of 
        duty-free treatment under this title with respect to the 
        country.''.

SEC. 6. ASSESSMENT AND REPORT ON COMPLIANCE WITH ELIGIBILITY 
              REQUIREMENTS.

    Section 502 of the Trade Act of 1974, as amended by sections 3 
through 5, is further amended by adding at the end the following:
    ``(h) Assessment and Report on Compliance With Eligibility 
Requirements.--
            ``(1) In general.--The President shall--
                    ``(A) on an annual basis--
                            ``(i) conduct assessments of the compliance 
                        of an appropriate number of countries 
                        designated as beneficiary developing countries 
                        for purposes of this title in meeting or 
                        continuing to meet the eligibility requirements 
                        under this title; and
                            ``(ii) make determinations with respect to 
                        whether to initiate full reviews of the 
                        practices of those countries to assess the 
                        continued eligibility of those countries for 
                        designation as beneficiary developing countries 
                        under this title; and
                    ``(B) submit to Congress a report consisting of the 
                results of such assessments and determinations.
            ``(2) Frequency.--The President shall conduct an assessment 
        described in clause (i) of paragraph (1)(A) and make a 
        determination described in clause (ii) of that paragraph with 
        respect to each country designated as a beneficiary developing 
        country for purposes of this title not less frequently than 
        once every 3 years.''.

SEC. 7. MODIFICATIONS TO RULES OF ORIGIN.

    (a) In General.--Section 503(a)(2) of the Trade Act of 1974 (19 
U.S.C. 2463(a)(2)) is amended--
            (1) in subparagraph (A), in the matter following clause 
        (ii)(II), by striking ``35 percent'' and inserting ``the 
        percentage described in subparagraph (B)'';
            (2) by redesignating subparagraph (B) as subparagraph (C);
            (3) by inserting after subparagraph (A) the following:
                    ``(B) Percentage described.--The percentage 
                described in this subparagraph is--
                            ``(i) in the case of articles entered 
                        before January 1, 2027, 35 percent;
                            ``(ii) in the case of articles entered on 
                        or after January 1, 2027, and before January 1, 
                        2029, 40 percent;
                            ``(iii) in the case of articles entered on 
                        or after January 1, 2029, and before January 1, 
                        2031, 45 percent; and
                            ``(iv) in the case of articles entered on 
                        or after January 1, 2031, 50 percent.''; and
            (4) by adding at the end the following:
                    ``(D) Pass-through and cost or value of materials 
                produced in the customs territory of the united 
                states.--
                            ``(i) In general.--The duty-free treatment 
                        provided under this title shall apply to any 
                        article that meets the requirements of this 
                        paragraph.
                            ``(ii) Exception with respect to materials 
                        produced in the customs territory of the united 
                        states.--To the extent that the cost or value 
                        of materials produced in the customs territory 
                        of the United States is included with respect 
                        to an article, an amount not to exceed 15 
                        percent of the appraised value of the article 
                        at the time it is entered that is attributed to 
                        such United States cost or value may be applied 
                        toward determining the applicable percentage 
                        described in subparagraph (B).
                            ``(iii) No pass-through to other 
                        programs.--Notwithstanding clause (i), duty-
                        free treatment under any other program 
                        providing such treatment for an article, 
                        conditional on the eligibility of an article to 
                        be treated as originating for purposes of this 
                        paragraph, may only be extended to an article 
                        that is otherwise eligible for duty-free 
                        treatment under this title in a calendar year--
                                    ``(I) if the article would remain 
                                eligible for such treatment even if 
                                subparagraph (A) were applied by 
                                substituting `35 percent' for `the 
                                percentage described in subparagraph 
                                (B)' with respect to that calendar 
                                year; and
                                    ``(II) if no amount attributable to 
                                United States cost or value, as 
                                authorized by clause (ii) of this 
                                subparagraph, would be required to be 
                                applied in order to achieve such 
                                eligibility.''.
    (b) Report.--
            (1) In general.--Not later than January 1, 2026, the United 
        States Trade Representative shall submit to Congress a report 
        on the impact of the Generalized System of Preferences rule of 
        origin requirements under section 503(a)(2)(A)(ii)(I) of the 
        Trade Act of 1974 (19 U.S.C. 2463(a)(2)(A)(ii)(I)) in fostering 
        regional economic integration through program cumulation among 
        regional associations.
            (2) Matters to be included.--The report required under this 
        subsection shall include recommendations regarding--
                    (A) new regional associations eligible for 
                treatment as one country under the provisions of 
                section 507(2) of the Trade Act of 1974 (19 U.S.C. 
                2467(2)); and
                    (B) updates to the rule of origin methodology under 
                section 503 of such Act that would better maximize 
                content from beneficiary developing countries and the 
                United States.

SEC. 8. MODIFICATIONS TO COMPETITIVE NEED LIMITATION.

    (a) In General.--Section 503 of the Trade Act of 1974 (19 U.S.C. 
2463) is amended--
            (1) in subsection (c)(2)--
                    (A) in subparagraph (A)(ii)--
                            (i) in subclause (I), by striking ``for 
                        1996, $75,000,000'' and inserting ``for 
                        calendar year 2023, $500,000,000''; and
                            (ii) in subclause (II), by striking 
                        ``$5,000,000'' and inserting ``2.5 percent of 
                        such applicable amount'';
                    (B) in subparagraph (C), by striking ``may, 
                subject'' and inserting ``should, subject''; and
                    (C) in subparagraph (F)(ii)--
                            (i) in subclause (I), by striking ``for 
                        calendar year 1996, $13,000,000'' and inserting 
                        ``for calendar year 2023, $50,000,000''; and
                            (ii) in subclause (II), by striking 
                        ``$500,000'' and inserting ``2.5 percent of 
                        such applicable amount'';
            (2) in subsection (d)(4)(B), by adding at the end the 
        following:
                    ``(iii) Clause (ii)(II) shall not apply with 
                respect to any article if a like or directly 
                competitive article was not produced in the United 
                States in any of the preceding 3 calendar years.''.
    (b) Applicability.--
            (1) In general.--The amendments made by subsection (a) 
        shall take effect on the date of the enactment of this Act.
            (2) Restoration of duty-free treatment.--
                    (A) List required.--Not later than 120 days after 
                the date of the enactment of this Act, the President 
                shall--
                            (i) list each article with respect to which 
                        duty-free treatment was eliminated (as of the 
                        date of the enactment of this Act) pursuant to 
                        subsection (c) of section 503 of the Trade Act 
                        of 1974 that is eligible for such treatment 
                        pursuant to such section 503 as amended by 
                        subsection (a) of this section; and
                            (ii) determine, with respect to each such 
                        article, whether the article is a potentially 
                        sensitive product that warrants review pursuant 
                        to subsection (c)(1) of such section 503 for 
                        the continued withholding of duty-free 
                        treatment.
                    (B) Prompt restoration.--Except for articles for 
                which the President makes an affirmative determination 
                pursuant to subparagraph (A)(ii), the President shall 
                restore duty-free treatment to each article included in 
                the list described in subparagraph (A)(i) on such 120th 
                day after date of enactment.
            (3) Expedited review of certain articles for exclusion from 
        duty-free treatment.--The President shall review, pursuant to 
        section 503(c)(1) of the Trade Act of 1974 (19 U.S.C. 
        2463(c)(1)), whether duty-free treatment should continue to be 
        withheld from each article for which the President makes an 
        affirmative determination pursuant to paragraph (2)(A)(ii). Not 
        later than 1 year after the date of the enactment of this Act, 
        the President shall restore duty-free treatment to each article 
        for which such review determines that such treatment should not 
        be withheld.
            (4) Reports.--Not later than 1 year after the date of the 
        enactment of this Act, the President shall submit to the 
        Committee on Ways and Means of the House of Representatives and 
        the Committee on Finance of the Senate a report containing--
                    (A) the results of the reviews conducted pursuant 
                to paragraph (3); and
                    (B) justifications for the reasons for which duty-
                free treatment was withheld or restored with respect to 
                articles described in such paragraph.

SEC. 9. EXPEDITED PRODUCT COVERAGE PETITION PROCESS.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the United States International Trade Commission 
shall publish in the Federal Register and on a publicly available 
internet website of the Commission a notice requesting interested 
parties to submit to the Commission, during the 60-day period beginning 
on the date of such publication, a petition--
            (1) to add one or more headings or subheadings of the 
        Harmonized Tariff Schedule of the United States to, or remove 
        one or more such headings or subheadings from, the list of 
        articles that may not be designated as an eligible article for 
        duty-free treatment pursuant to section 503(b) of the Trade Act 
        of 1974 (19 U.S.C. 2463(b)); or
            (2) to provide duty-free treatment to one or more headings 
        or subheadings of the Harmonized Tariff Schedule under the 
        Generalized System of Preferences that are--
                    (A) not restricted under such section 503(b) from 
                designation as an eligible article; and
                    (B) not otherwise designated an eligible article by 
                the President pursuant to section 501 or section 503(a) 
                of such Act (19 U.S.C. 2461; 2463(a)).
    (b) Contents of Petition.--A petition submitted pursuant to 
subsection (a) shall be eligible for consideration under the process 
provided by this section only if such petition includes--
            (1) the name and address of the petitioner;
            (2) the 8-digit subheading level or levels under the 
        Harmonized Tariff Schedule with respect to which the petition 
        is submitted; and
            (3) for a petition submitted pursuant to subsection (a), a 
        certification that the petitioner is an interested party and a 
        brief description of the manner and extent to which the 
        petitioner is a likely beneficiary with respect to the addition 
        or removal of the heading or subheading level concerned.
    (c) Publication of Petitions.--As soon as practicable after the 60-
day period described in subsection (a), and not later than 30 days 
after the end of such period, the Commission shall publish on a 
publicly available internet website of the Commission the contents of 
each petition received.
    (d) Opportunity for Public Comment.--During the 45-day period 
beginning on the date of the publication of petitions pursuant to 
subsection (c), the Commission shall publish in the Federal Register 
and on a publicly available internet website of the Commission a notice 
requesting members of the public to submit comments to the Commission 
with respect to the changes sought by the petitions.
    (e) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Commission shall submit to the appropriate 
congressional committees a report on each eligible petition submitted 
pursuant to the process provided by this section that includes, with 
respect to the article or articles concerned in each such petition--
            (1) data from the 5 most recent calendar years for which 
        complete information is available on--
                    (A) sources of imports;
                    (B) values of imports;
                    (C) market share of imports (to the extent 
                practical); and
                    (D) domestic production (to the extent practical);
            (2) any information on whether the product is used as an 
        input in United States manufacturing; and
            (3) a summary of information provided in the form of 
        comments rebutting or objecting to the petition.
    (f) Authorities.--
            (1) Procedures.--The Commission shall prescribe and publish 
        in the Federal Register and on a publicly available internet 
        website of the Commission all procedures to be complied with by 
        members of the public submitting petitions.
            (2) Judicial review precluded.--The exercise of functions 
        under this section shall not be subject to judicial review.
    (g) Interested Party Defined.--In this section, the term 
``interested party'' has the definition given such term in section 771 
of the Tariff Act of 1930 (19 U.S.C. 1677), except that an interested 
party under this section may not include--
            (1) any person described in paragraph (9)(A) of such 
        section, other than a person that is an importer or a business 
        association of importers; or
            (2) any person described in paragraph (9)(B) or (9)(G) of 
        such section.

SEC. 10. EXTENSION OF CUSTOMS USER FEES.

    (a) In General.--Section 13031(j)(3) of the Consolidated Omnibus 
Budget Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended--
            (1) in subparagraph (A), by striking ``September 30, 2031'' 
        and inserting ``September 30, 2033''; and
            (2) in subparagraph (B)(i), by striking ``September 30, 
        2031'' and inserting ``September 30, 2033''.
    (b) Rate for Merchandise Processing Fees.--Section 503 of the 
United States-Korea Free Trade Agreement Implementation Act (Public Law 
112-41; 19 U.S.C. 3805 note) is amended by striking ``September 30, 
2031'' and inserting ``September 30, 2033''.
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