US President Donald Trump terminates preferential trade status for India
under GSP
On
March 4, Mr. Trump announced that the US intends to terminate India’s
designations as a beneficiary developing country under the GSP programme. The
60-day notice period ended on May 3.
President Donald Trump has terminated
India’s designation as a beneficiary developing nation under the key GSP trade
programme after determining that it has not assured the US that it will provide
“equitable and reasonable access to its markets.” The Generalized System of
Preference (GSP) is the largest and oldest US trade preference programme and is
designed to promote economic development by allowing duty-free entry for
thousands of products from designated beneficiary countries.
“I have determined that India has not
assured the US that it will provide equitable and reasonable access to its
markets. Accordingly, it is appropriate to terminate India’s designation as a
beneficiary developing country effective June 5, 2019,” Trump said in a
proclamation on Friday, ignoring the plea made by several top American
lawmakers as it will cost American businesses over $300 million in additional
tariffs every year.
On March 4, Mr. Trump announced that the
US intends to terminate India’s designations as a beneficiary developing
country under the GSP programme. The 60-day notice period ended on May 3.
The Trump administration has prioritised
working with the Government of India to ensure that US companies have a
level-playing field, a senior State Department official told reporters on
Thursday, hours after Narendra Modi was sworn in as Prime Minister for a second
time following his spectacular electoral victory in the general elections.
Under the GSP programme, nearly 2,000 products including auto components and
textile materials can enter the US duty-free if the beneficiary developing countries
meet the eligibility criteria established by Congress.
India was the largest beneficiary of the
programme in 2017 with $5.7 billion in imports to the US given duty-free status
and Turkey the fifth largest with $1.7 billion in covered imports, according to
a Congressional Research Service report issued in January.
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