New Legislation May Help Shoe Companies & Consumers Save Millions on Shoes

A new bill introduced in Congress late Thursday night may help U.S. footwear companies and consumers save money on shoes.

The legislation calls for certain footwear to be added to the Generalized System of Preferences (GSP) program. GSP, established by the Trade Act of 1974, eliminates duties — only for products that are not manufactured in the U.S — on thousands of goods imported from 120-plus developing nations. The program did not include footwear when it was introduced, but several trade organizations — including the American Apparel & Footwear Association (AAFA) and the Footwear Distributors & Retailers of America (FDRA) — have spent years advocating for the inclusion of certain types of shoes.

The initiative targets a modest list of “non-controversial” footwear items that its authors believe can be added to GSP, including some categories of athletic shoes and boots for women, men, youth and toddlers.

The GSP Footwear Bill covers U.S. imports from GSP countries amounting to 44 million pairs worth $450 million in customs value, the AAFA said. In total, the organization said the legislation would save U.S. companies $57 million in duties, which should trickle down to consumers.

AAFA strongly supports this new footwear legislation as it makes small but critical changes to products that are eligible for GSP status,” Rick Helfenbein, president and CEO of AAFA, said. “If these footwear items are ultimately designated as GSP-eligible, companies will be able to use duty savings to support U.S. workers, to invest in product innovation, and have the ability to pass along savings to consumers.”

FDRA president and CEO Matt Priest said that in addition to his organization’s support of the new bill — as well as its potential cost savings —  he would like to see it broadened to include more categories of footwear.

It’s limited coverage, so we are talking with the authors about broadening the bill and adding different kinds of coverage to the bill so more companies can take advantage of it,” Priest said. “From there, it needs to be introduced to the Senate, and hopefully it gets added to a broader trade package for GSP renewal before the program expires at the end of the year.”

GSP is set to expire on Dec. 31, but — as has been the case over the past four decades — its supporters push for a three-year extension, which has historically been granted.

These are small steps toward what ultimately can be a larger review of the GSP program, and the opportunity to update the 42-year-old trade program,” Helfenbein noted. “In addition, we urge Congress to quickly move forward with the underlying GSP renewal legislation, which is scheduled to expire at the end of the year.”

While he is happy to see the GSP footwear bill rally support, Priest said his organization would like to see a larger trade deal happen, similar to the Trans-Pacific Partnership, from which President Donald Trump withdrew in January.

About 93 or 94 percent of our imports come from China, Vietnam and Indonesia, so I would much rather have been celebrating the one-year anniversary of the implementation of TPP. But be that as it may, we don’t discriminate against any opportunity to lower our duty rates for our members,” Priest said.

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