Local RV manufacturers could see a drop in production costs if President Barack Obama approves the Generalized System of Preference (GSP) program, according to a report by the South Bend Tribune.
Last Thursday (June 11), the U.S. House of Representatives passed a bill renewing several trade programs, including the GSP, the largest and oldest trade preference program in the U.S. Established in 1974, GSP eliminates duties on about 5,000 different types of products from 122 designated countries and territories. With overwhelming bipartisan support, the Senate is expected to quickly reconcile issues in the House bill to put the trade measure in front of the president.
The program was designed to provide opportunities for some of the world’s poorest areas to use trade to grow their economies, while also benefiting American companies with reduced costs. In total, it is estimated that U.S. companies paid about $1 billion in increased tariffs over the last two years. The trade deal died in August 2013 amid congressional gridlock over a completely different trade debate that the GSP was connected with.
For the RV industry, there’s one product in particular that is important — luan plywood, a pliable product produced only in southwest Asia. Although it’s the only product in the GSP deal that RV manufacturers regularly use, the Recreation Vehicle Industry Association (RVIA) says it has been costly to companies, and in turn consumers.
Read the full report here.