Ideas to Action:

Independent research for global prosperity


Views from the Center


The US Senate last Thursday passed a temporary extension of programs providing preferential access to the US market for developing countries. This is better than letting these programs expire but not as good as putting them on a more permanent footing.

The Generalized System of Preferences, which was last extended in 2006, and a regional program covering Colombia, Peru, Ecuador, and Bolivia, which has been extended four times in the past two years, were extended for up to one more year. The House followed suit on Friday before leaving town to campaign, and the bill now goes to President Bush for his signature.

The goal of these preference programs, along with separate regional programs for sub-Saharan Africa and the Caribbean, is to encourage investment and job creation in poorer countries. The pattern of repeated, relatively short-term extensions undercuts that goal, however, by creating uncertainty among investors and buyers about the stability of the access provided. Congressman Rangel (D-NY), the chair of the House Ways and Means Committee, has announced that he wants to review and reform these programs next year. Making them permanent -- or at least extending them for a longer period, say 10 years- -- should be a central part of that reform.

For more on revising trade preference programs, see my chapter U.S. Trade Policy and Global Development in CGD's latest book, The White House and the World" as well as last year's CGD Policy Brief, Trade Policy for Development: Reforming U.S. Trade Preferences.

Related Topics:


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.