United States to end trade preferences for Turkey, India

Donald Trump india preferential trade agreement india Us trade relations Donald Trump on india preferential trade agreement India US trade Indian US exports Generalized System of Preferences US GSP program indian express

US President Donald Trump who has vowed to reduce US trade deficits has repeatedly called out India for its high tariffs

USA president Donald Trump looked set to open a new front in his trade wars on Monday with a plan to end preferential trade treatment for India that allows duty-free entry for $5.6bn worth of the country's exports to the United States.

US President Donald Trump continues to reshape the world's trade: recently he has decided that goods from Turkey and India will no longer be eligible for tariff-free access to the American market.

BackgroundUnder the United States GSP programme, certain products can enter the United States duty-free if beneficiary developing countries meet the eligibility criteria established by Congress. GSP criteria include, among others, respecting arbitral awards in favour of United States citizens or corporations, combating child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection, and providing the United States with equitable and reasonable market access.

According to the official, who refused to be identified, India was planning to offer a considerable trade package to the USA, in terms of greater access for American agricultural imports to India through lowering of tariffs.

Turkey is no longer eligible to participate in the Generalized System of Preferences program because it "is sufficiently economically developed", USTR said in a news release.

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Mukherjee said India has outgrown its GSP status, although she did dispute Trump's assertion that India is not providing the US with reasonable market access.

As a result, he directed the US Trade Representative's (USTR) office to remove India from a programme that grants it preferential trade treatment.

The GSP criteria include, among others, respecting arbitral awards in favour of United States citizens or corporations, combatting child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection and providing the U.S. with equitable and reasonable market access.

Also Monday, Trump said he intends to end Turkey's status as a GSP beneficiary, based on that country's economic growth.

Given the ongoing situation at trade front, "I do not think any knee-jerk reactions would be warranted" from India side, the secretary said. Contributing to the imbalance are India's import licensing requirements (including for motorcycles), export subsidy programs and lack of transparency in its laws regulating trade, says the Commerce Department's International Trade Administration. "For the sake of the many Americans and Indians who relied on GSP benefits, I hope that India will work to quickly address these legitimate concerns".

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Trade ties with the U.S. were hurt after India unveiled new rules on e-commerce limiting the way internet retail giants Amazon and Walmart Inc-backed Flipkart do business. As many as 5,111 Indian products, ranging from textiles to engineering goods, are covered under GSP, of which India was using only 2,167 tariff lines. India declined saying it had commitments to make such medical devices affordable to the Indian patients, but agreed to open up the Indian market for a wide variety of USA farm produce - from cherries to chicken to milk products, which New Delhi had long resisted because of reservations over United States farm practices.

While India announced retaliatory tariffs, they have not been enacted. "In a few instances, specific United States requests were not found reasonable and doable at this time by the departments concerned, in light of public welfare concerns reflective of India's developing country status and its national interest", Wadhawan said.

India had opposed proposals to end the GSP saying that it would be "discriminatory, arbitrary" and hurt the country's development.

It comes as the United States negotiates with China to resolve a damaging trade war.

Will India Still Benefit from U.S.

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