Following Election Day, Congress is expected to be in session (118th Congress, 2nd session) through December 19 (except Thanksgiving week) for a “lame duck” session. The California Chamber of Commerce hopes that during this session, several pending CalChamber-supported international-related proposals will be approved.
State Trade Expansion Program (STEP)
The CalChamber supports reauthorization of the State Trade Expansion Program (STEP) at the U.S. Small Business Administration (SBA) by adding the STEP Modernization Act of 2024 to the National Defense Authorization Act (NDAA) bill. The STEP program is a vital resource to help small businesses compete in the global economy.
Exports play a critical role in the economy, accounting for nearly 12% of the U.S. gross domestic product (GDP). Exports supported more than 9 million U.S. jobs in 2023.
Despite the enormous potential of exporting, only 280,000 of the more than 30 million small businesses in the United States export their products or services. The STEP grant program is the bridge and catalyst to increase the number of small businesses that export.
Since its inception in 2010, the STEP program has assisted more than 15,000 small businesses to start or expand their exports. Historically, the program has yielded a return on investment of greater than $30 to $1 in federal funds. This seed investment helps small businesses grow, diversify markets, and create stable, higher-wage jobs in the United States.
The STEP Modernization Act of 2024 will increase the efficiency and overall effectiveness of this program by streamlining the application and reporting processes. Reducing the administrative burden on both grantees and the SBA will facilitate greater use of this program, resulting in increased exports by small businesses.
In California, the Governor’s Office of Business and Economic Development (GoBiz) administers the STEP program and has a list of trade shows and missions in which small businesses can apply to participate. To learn more, visit California State Trade Expansion Program (STEP).
Generalized System of Preferences
The Generalized System of Preferences (GSP), which lapsed on December 31, 2020, supports the development of 119 emerging economies by eliminating tariffs and opening the U.S. market to qualifying, nonsensitive exports from those countries. At the same time, GSP supports U.S. workers and manufacturers by reducing costs of imported inputs and equipment and helps American families stretch their paychecks by lowering the costs of consumer goods imported duty-free.
Since GSP expired, U.S. companies have paid more than $4 billion in extra taxes. The lapse has contributed to the significant cost increases on many everyday items over the last several years, the top economic concern for most Americans. Expiration of GSP also has hindered U.S. companies’ efforts to diversify suppliers and build more resilient supply chains, including reducing dependence on China.
Fortunately, much congressional work on GSP renewal legislation is already done. The GSP Reform Act (H.R.7986) incorporates virtually all of the bipartisan GSP provisions from the trade package approved 91-4 by the U.S. Senate during the 117th Congress. H.R. 7986 also modernizes the program with updates to review procedures.
Given the uncertainty of the last several years, and the competing priorities for the new Congress and administration in 2025, it is critical that Congress passes a retroactive GSP renewal before the end of 2024.
African Growth and Opportunity Act
Enacted in May 2000, the African Growth and Opportunity Act (AGOA) is the cornerstone of U.S. economic and commercial engagement with the countries of sub-Saharan Africa.
AGOA provides eligible sub-Saharan African countries with duty-free access to the U.S. market for more than 1,800 products, in addition to the more than 5,000 products that are eligible for duty-free access under the Generalized System of Preferences program. Thirty-two countries are eligible for AGOA benefits in 2024.
To meet the AGOA’s rigorous eligibility requirements, countries must establish or make continual progress toward establishing a market-based economy, the rule of law, political pluralism, and the right to due process. In addition, countries must eliminate barriers to U.S. trade and investment, enact policies to reduce poverty, combat corruption, and protect human rights.
By providing new market opportunities, the AGOA has helped bolster economic growth, promoted economic and political reform, and improved U.S. economic relations in the region.
Congress first passed the program in 2000, when Bill Clinton was president, and has renewed it several times with bipartisan support. The latest 10-year extension expires on September 30, 2025, and Congress has been slow in renewing.
The AGOA Renewal and Improvement Act of 2024 (S.4110), has been introduced in Congress and referred to the U.S. Senate’s committee on finance for initial consideration.
The new act extends the AGOA preference sunset clause for 16 years — from September 2025 to September 2041. This long-term extension is expected to provide greater stability and predictability for trade relations between the United States and AGOA-eligible countries.
The CalChamber believes that it is in the mutual economic interest of the United States and sub-Saharan Africa to promote stable and sustainable economic growth and development in sub-Saharan Africa and that this growth depends in large measure upon the development of a receptive environment for trade and investment.
The CalChamber is supportive of the United States seeking to facilitate market-led economic growth in, and thereby the social and economic development of, the countries of sub-Saharan Africa. In particular, the CalChamber is supportive of the United States seeking to assist sub-Saharan African countries, and the private sector in those countries, to achieve economic self-reliance.
