CNL Update Act
Bill: H.R.6171 | Sponsor: Rep. Walorski, Jackie (R-IN)
Policy area: Foreign Trade and International Finance

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.

To modify the competitive need limitation provisions under the 
               Generalized System of Preferences program.

    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 ``CNL Update Act''.

SEC. 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.) to assist such countries in meeting the 
        eligibility criteria under such program;
            (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)), the President should, in a manner consistent 
        with statutory requirements--
                    (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.

SEC. 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) is amended--
            (1) in subsection (c)(2)--
                    (A) in subparagraph (A)(ii)(II), by striking 
                ``$5,000,000'' and inserting ``an amount equal to 6.5 
                percent of such applicable amount'';
                    (B) in subparagraph (C)--
                            (i) by striking ``may, subject'' and 
                        inserting ``should, subject''; and
                            (ii) by striking ``the limitations in 
                        subparagraph (A)'' and inserting ``the 
                        limitations in subparagraph (A) or (F)'';
                    (C) in subparagraph (F)--
                            (i) in clause (i), by striking ``may 
                        disregard'' and inserting ``should disregard''; 
                        and
                            (ii) in clause (ii)(II), by striking 
                        ``$500,000'' and inserting ``an amount equal to 
                        6.5 percent of such applicable amount''; and
                    (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.) 
        during the calendar year preceding the calendar year in which 
        the first annual review is carried out under such title V after 
        such date of enactment and each subsequent calendar year.
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