The U.S. Generalized System of Preferences (GSP) is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.GSP was instituted on January 1, 1976, by the Trade Act of 1974. Congressional authorization of the GSP program expired on December 31, 2010. As of late March 2011, Congress had not reauthorized the program.
Bill H.R. 6517 did not contain a renewal to GSP on Dec. 15 2010. After expiration, bill S.308, section II, (trade extenders act of 2011) sought to extend GSP until June 30, 2012 S.308 is in the first step of being passed. It was introduced to Congress on February 8, 2011. It had been read and referred to the Committee of Finance. Since then, GSP is subject to a hold in Senate.
In the Senate, any Senator can place a hold on any legislation for any reason – which prevents the Senate from voting on a particular bill. Alabama Senator Jeff Sessions has put a hold on legislation that would extend GSP on behalf of a sleeping bag company in Alabama that is being hurt by imports of sleeping bags from Bangladesh. While a possible solution to this issue would be to pass legislation that extends GSP but eliminates preferential duty rates for sleeping bags from Bangladesh, Kentucky Senate Minority Leader Mitch McConnell has blocked this possible compromise because of a Kentucky company that imports sleeping bags from Bangladesh. If Senator Sessions maintains his hold on the GSP bill, and Senator McConnell blocks the possible compromise to the bill, GSP will remain expired. Unless these Senators and their constituents do not budge on either term, nothing will be happening with GSP for a while.