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NFTC President Calls on Congress to Modernize Trade Preference Programs
Date: 11/17/2009
Written By: Jennifer Cummings, The Fratelli Group for NFTC, 202-822-9491

Washington, DC – In testimony today before the House Ways and Means Subcommittee on Trade, National Foreign Trade Council (NFTC) President Bill Reinsch called on Congress to modernize U.S. trade preference programs by moving toward a unified set of preferences, ending short and uncertain renewals and simplifying the rules. Reinsch also recommended that preference programs be reformed to provide permanent, 100 percent duty-free and quota-free benefits for eligible lesser-developed countries (LDCs) and to more completely tie renewal, eligibility and graduation to capacity building.

Reinsch began his testimony by outlining the economic benefits of trade preference programs to U.S. companies and consumers, stating “the tariff relief they provide benefits small and medium size companies as much as it benefits large corporations. This tariff elimination also reduces costs to the U.S. consumer. In the historic economic downturn we are now experiencing, these multiple domestic benefits are significant.”

“Beyond this domestic benefit, we and our members believe in the value of a stable system of trade preferences that offer duty-free access to the U.S. market as a tool to provide broad and deep benefits to some of the world’s poorest countries. This is not only a moral obligation, but also in our national economic and security self interest,” Reinsch stated.

He noted that preferential access to the U.S. market under the Caribbean Basin Economic Recovery Act in the 1980s led to increased foreign direct investment and income growth in Central America. He also pointed out that the eligibility criteria in U.S. preference programs have led to economic and legal reforms in beneficiary countries, including stronger protection of innovation and intellectual property rights.

“We understand that preferential access to the U.S. market is a privilege, not an entitlement, and along with it go responsibilities. Countries who receive these preferences must demonstrate the vision to undertake other efforts to improve their citizens’ livelihood,” said Reinsch.

“Preferences are only one tool to spread economic opportunity globally. We believe that U.S. leadership in finding a way forward to conclude the Doha Round of WTO negotiations is of paramount importance. Clearly articulating and implementing a comprehensive forward looking national trade policy that opens markets for U.S. business, workers, farmers and ranchers, must go hand in hand with the important effort to update and modernize the system of U.S. trade preference programs, and we look forward to working with Congress and this Administration in this effort,” he concluded.

In late April, the NFTC joined a broad coalition of trade associations and non-governmental organizations in sending a letter to the U.S. Trade Representative and the Chairmen and Ranking Members of the Senate Finance and House Ways and Means Committees, outlining a consensus agreement on recommended reforms to the preference programs. The group continues to meet to devise policies that would tangibly improve U.S. trade preferences, including a number of the recommendations Reinsch outlined today.

For Reinsch’s full testimony, please click here.  For an archived Webcast of this morning’s proceedings, please visit  

About the NFTC

Advancing Global Commerce for 95 Years -The National Foreign Trade Council is a leading business organization advocating an open, rules-based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.