March 5, 2019
WASHINGTON: The US plans to end the preferential trade treatment for India
and Turkey, the US trade chief's office has said. This follows President Donald
Trump's recent statement that India is "a high-tariff country." And as for Turkey,
the trade office said, that country has developed enough not to attract preferential treatment.
India currently exports $5.6 billion of goods to the US duty-free under the
Generalised System of Preferences (GSP). The "actual benefit" from the preferential
trade treatment is $250 million a year.
The Indian Government on Tuesday said that the move will not have a "significant
impact" on India. "It seems like we're looking at a non-GSP trade with the US,"
Commerce Secretary Anup Wadhawan
said at a media briefing. The "actual benefit,"
which will be impacted from the US' decision will only be to the tune of $190
million, he claimed, according to NDTV.
The withdrawal of free trade is likely to hit raw materials and intermediary
goods, he said. Wadhawan said "trade talks with US will continue.
While the US had a big share in Indian medical devices market, India capped
pricing of devices like stents and knee caps recently. Trump had taken objections
to Indian trade curbs. He also called India "a high-tariff country."
The US Trade Representative's Office said it will take at least 60 days for
the new regime to take effect. India is the world's largest beneficiary of the
GSP programme.
Washington "intends to terminate India's and Turkey's designations as beneficiary
developing countries under the Generalised System of Preferences (GSP) programme
because they no longer comply with the statutory eligibility criteria," the
Office of the US Trade Representative said in a statement on Monday, according
to Al Jazeera.
India has failed to provide assurances that it would allow required market
access, while Turkey is "sufficiently economically developed" that it no longer
qualifies, the statement said.
Under the GSP programme, "certain products" can enter the US duty-free if countries
meet eligibility criteria including "providing the US with equitable and reasonable
market access".
