The House of Representatives voted to renew a long-standing program that allows about 130 developing countries to export thousands of goods to the United States without paying duties.
House Speaker John Boehner says he hopes President Barack Obama would build on the success of passing the trade bill by submitting three long-delayed free trade agreements with Colombia, Panama and South Korea to Congress for a vote.
"By making American manufacturers more competitive with their overseas rivals, this bill removes another obstacle to private-sector job growth and can provide a much needed boost for our economy. I hope the Senate will take it up and pass it promptly," Boehner says.
Renewal of the Generalized System of Preferences, which also requires Senate action, would help support about 82,000 American jobs tied to products imported under the program, house ways and means committee chairman Dave Camp says.
"Many US companies source raw materials and other inputs from GSP countries, and the duty-free treatment of these imports reduces the production costs of these US manufacturers, making them more competitive," says Camp.
About three-quarters of all GSP-eligible imports are raw materials, components, parts or machinery and equipment used to manufacture goods in the United States, the Michigan Republican adds.
The bill extends the program through July 31, 2013. It also is retroactive to last December 31, when the program expired after Senator Jeff Sessions blocked efforts to renew it.
The Alabama Republican complained that duty-free sleeping bags imported from Bangladesh under the program threatened to drive a manufacturer in his state out of business.
US companies have since been required to pay import taxes on some 4,800 goods that previously came in duty-free.
The US Chamber of Commerce pressed for renewal of the program in a letter to members of Congress, which said products imported under the program "generally do not compete with US-made goods in any significant way."
The chamber and other US business groups also hope the House vote will help set the stage for Obama to formally submit trade deals with South Korea, Colombia and Panama to Congress.
The decades-old GSP program has been caught up in a protracted debate on the three trade deals and the separate Trade Adjustment Assistance program to help retrain workers who have lost their jobs because of foreign competition.
The House GSP now goes to the Senate, where it is expected to be combined with a bill to renew the TAA program.
It is then expected to return to the House for another vote held "in tandem" with the three trade deals.