Generalized System of Preferences Reform Act

This bill reauthorizes and modifies the Generalized System of Preferences (GSP), a program that allows duty-free entry of certain products from developing countries. It extends the program through 2030, adds new eligibility criteria for beneficiary countries, changes rules of origin, and updates competitive need limitations.

Sec. 2, Extension of GSP: Extends the GSP program from December 31, 2020 to December 31, 2030. Allows retroactive duty-free treatment for certain entries made after December 31, 2020 but before the effective date, if a request is filed with U.S. Customs and Border Protection within 180 days of enactment.

Sec. 3, Beneficiary country modifications: Adds China to the list of countries ineligible for GSP designation. Adds new mandatory grounds for denying or withdrawing designation, including failure to enforce environmental laws, gross human rights violations, allowing construction of military bases by a covered nation, and undermining U.S. national security. Adds new discretionary factors for the President to consider, such as market access for U.S. agriculture, relations with covered nations, rule of law, anti-corruption efforts, tax treatment, environmental enforcement, women's economic empowerment, digital trade barriers, and more. Defines "common multilateral environmental agreement" as specific treaties to which both the U.S. and the country are parties.

Sec. 4, Withdrawal, suspension, or limitation: When considering withdrawing or limiting GSP benefits, the President must consider the impacts on meeting eligibility criteria and on workers and populations in the country, and must take steps to facilitate continued duty-free treatment for products where imposing duties would harm those criteria or cause severe economic harm.

Sec. 5, Procedural enforcement reforms: Requires a public hearing or at least 30 days for public comment before withdrawing or limiting GSP benefits. Requires the U.S. Trade Representative to publish in the Federal Register the rationale for any determination on petitions to review a country's eligibility.

Sec. 6, Annual assessments and reports: Requires the President to annually assess compliance of beneficiary countries and determine whether to initiate full reviews, and to report to Congress. Each country must be assessed at least once every three years.

Sec. 7, Rules of origin: Increases the minimum value-added requirement for duty-free treatment from 35% to 50% over several years (35% through 2026, 40% for 2027-2028, 45% for 2029-2030, 50% from 2031). Allows up to 15% of the article's value from U.S. materials to count toward that percentage. Restricts pass-through of this benefit to other programs. Requires a report by January 2026 on the impact of cumulation rules on regional economic integration.

Sec. 8, Competitive need limitations: Updates the dollar thresholds that trigger loss of duty-free treatment for a product from a country: for 2023, the general threshold is $500 million (up from $75 million for 1996), and the percentage threshold is 2.5% of that amount. For certain lesser-developed countries, the threshold is $50 million (up from $13 million for 1996), with a 2.5% percentage threshold. Requires the President to restore duty-free treatment to articles that lost it under the old thresholds, unless they are deemed potentially sensitive, and to report on the results.

Sec. 9, Expedited product coverage petition process: Directs the U.S. International Trade Commission to establish a process for interested parties to petition to add or remove products from the list of GSP-eligible articles. Requires a report to Congress within one year with import data and other information on each eligible petition.

Sec. 10, Customs user fees: Extends the authority to collect customs user fees (including merchandise processing fees) from September 30, 2031 to September 30, 2033.