CNL Update Act

To modify the competitive need limitation provisions under the Generalized System of Preferences program. 1. Short title This Act may be cited as the CNL Update Act 2. Sense of Congress It is the sense of Congress that— (1) United States trade capacity building agencies should work with, and provide appropriate resources to, beneficiary developing countries under the Generalized System of Preferences program under title V of the Trade Act of 1974 ( 19 U.S.C. 2461 et seq. (2) the goal of such eligibility criteria is to raise standards and improve the well-being of individuals in the beneficiary developing countries through trade and economic development; (3) trade policies cannot create a race to the top if punitive actions treat good and bad actors alike; (4) in determining appropriate actions to take under subsection (d) of section 502 of the Trade Act of 1974 ( 19 U.S.C. 2462(d) (A) consider the impact of withdrawal, suspension, or limitation of duty-free treatment on the criteria and factors affecting eligibility described in subsections (b) and (c) of such section; and (B) take all available steps to facilitate continued duty-free treatment for products where the imposition of duties is likely to slow or reverse progress made toward meeting the criteria and factors described in subsections (b) and (c) of such section or result in severe economic harm to United States entities, particularly small businesses; and (5) the United States Trade Representative should establish and maintain a process to mitigate the harm for products determined to meet the criteria and factors described in subsections (b) and (c) of section 502 of the Trade Act of 1974, including exploring the feasibility of preserving duty-free eligibility on a case-by-case basis for qualifying companies if the President decides to withdraw, suspend, or limit the application of the duty-free treatment accorded under title V of such Act. 3. Modification of competitive need limitation provisions under the Generalized System of Preferences program (a) In general Section 503 of the Trade Act of 1974 ( 19 U.S.C. 2463 (1) in subsection (c)(2)— (A) in subparagraph (A)(ii)(II), by striking $5,000,000 an amount equal to 6.5 percent of such applicable amount (B) in subparagraph (C)— (i) by striking may, subject should, subject (ii) by striking the limitations in subparagraph (A) the limitations in subparagraph (A) or (F) (C) in subparagraph (F)— (i) in clause (i), by striking may disregard should disregard (ii) in clause (ii)(II), by striking $500,000 an amount equal to 6.5 percent of such applicable amount (D) by inserting after subparagraph (F) the following: (G) Calculation of limitations There shall be counted against the limitations imposed under subparagraph (A) for any calendar year only that value of any eligible article of a beneficiary developing country that entered duty-free under this title during such calendar year. ; and (2) in subsection (d)(1), by striking , before November 1 of the calendar year beginning after the calendar year for which a determination described in subsection (c)(2)(A) was made with respect to such eligible article, (b) Effective date The amendments made by subsection (a)— (1) take effect on the date of the enactment of this Act; and (2) apply with respect to imports into the United States of eligible articles from beneficiary developing countries under title V of the Trade Act of 1974 ( 19 U.S.C. 2461 et seq.

Summary: CNL Update Act This bill makes changes to the procedures for competitive need limitations (CNL) and de minimis waivers under the Generalized System of Preferences (GSP) program. CNLs are quantitative ceilings on GSP benefits for each product and beneficiary developing country; a beneficiary developing country loses its GSP eligibility with respect to a product if the CNLs are exceeded and no waiver is granted. Currently, the President must terminate the duty-free treatment for a product from a beneficiary developing country if (1) imports of a product from a single country reach a specified threshold value, which increases by $5 million each calendar year; or (2) 50% or more of total U.S. imports of a product entering under the GSP come from a single country. This bill revises the annual adjustment amount from $5 million to an amount equal to 6.5%. Further, the bill sets the annual increase in the de minimis level to 6.5%. Currently, the de minimis level is adjusted each year in increments of $500,000.