On Monday night, a bill to designate certain footwear as eligible for the Generalized System of Preferences (GSP) program — which would make such items exempt from duties — was introduced in the Senate, a critical step following the bill’s introduction in the House in May.
Under the proposal, certain footwear not produced domestically would be eligible to be added to GSP for the first time since the program was enacted more than 40 years ago. 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 on the list.
The initiative targets a modest group of “noncontroversial” 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.
“This is a really big deal for the footwear industry,” said Nate Herman, SVP of supply chain at AAFA. “With 98 percent of all shoes being sold in the U.S. being imported, we have a huge bill every year, and this is a strong first step toward reducing that bill and enabling us to be able to reinvest those savings in making better shoes, [better wages for] U.S. workers and lowering prices for American consumers.”
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 when the bill was introduced in the House. In total, the organization said the legislation would save U.S. companies $57 million in duties, which should trickle down to consumers.
“Expanding the Generalized System of Preferences program to cover shoes will support and grow well-paying American jobs, from design and marketing to logistics and retail,” said AAFA president and CEO Rick Helfenbein.”Duty reduction means U.S. footwear companies can reduce costs that can instead be invested in American workers, product innovation, and savings that can be passed on to consumers.”
With the introduction of the bill, the AAFA said the focus now turns to gaining co-sponsors to build support for the legislation.
“We hope to include the GSP footwear bill in legislation to renew the overall GSP program — which requires regular renewal by Congress — before it expires at the end of the year,” the AAFA noted.