U.S. plans to end GSP eligibility of India and Turkey

The U.S. plans to end the preferential trade treatment afforded to India and Turkey under the Generalized System of Preferences, the Office of the U.S. Trade Representative said on Monday. USTR Robert Lighthizer said the president directed the move “because they no longer comply with the statutory eligibility criteria.” Under the law governing GSP, the changes won't take effect until at least 60 days after Congress and the governments of the two countries are notified, “and will be enacted by a Presidential Proclamation,” USTR's announcement said. Letters were sent to Congress on Monday. India, according to USTR, has failed “to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors.” The U.S. began a GSP eligibility review of India in April 2018. Bilateral talks aimed at easing trade tensions began at the same time. “India has implemented a wide array of trade barriers that create serious negative effects on United States commerce,” USTR said. “Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion.” Lighthizer last year sent a letter to India highlighting U.S. GSP concerns, which sources said were a factor in the decision to postpone a planned U.S.-India Trade Policy Forum. Inside U.S. Trade reported in January that U.S. and Indian officials had been discussing a range of trade issues with an eye toward some type of agreement following India's upcoming elections, which are slated to begin in April. Turkey’s termination from the GSP system, meanwhile, “follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market,” USTR said in its announcement. Turkey was designated as a beneficiary developing country in 1975. “An increase in Gross National Income (GNI) per capita, declining poverty rates, and export diversification, by trading partner and by sector, are evidence of Turkey’s higher level of economic development,” USTR added. The U.S. began to review Turkey's GSP eligibility last year after Turkey imposed tariffs in retaliation for U.S. Section 232 duties on steel and aluminum. In its August 2018 announcement of the hearing, USTR claimed that Turkey had recently “implemented a wide array of trade barriers that create serious negative effects on U.S. commerce, including imposing additional duties only on U.S. products, and in some instances, imposing additional duties that exceed the rates set out by Turkey in its World Trade Organization schedule of concessions.” Turkey argued in a public hearing last September that the U.S. would be in violation of World Trade Organization rules if it decided to strip the country of its GSP status Source: Inside US Trade