Trump moves to end special trade treatment for India
05 March, 2019, 11:39 | Author: Mary Valdez
U.S. President Donald Trump holds a bilateral meeting with India's Prime Minister Narendra Modi alongside the ASEAN Summit in Manila, Philippines November 13, 2017.
At the direction of President Donald Trump, US Trade Representative Robert Lighthizer announced that US intends to terminate India & Turkey's designations as Beneficiary Developing Countries under Generalized System of Preferences (GSP) programme.
India's top GSP exports to the United States in 2017 included motor vehicle parts, ferro alloys, precious metal jewellery, building stone, insulated cables and wires, said business group the Confederation of Indian Industry, which had lobbied against the withdrawal of preferential treatment. Announcing the termination, Trump said India had "not assured" the U.S. that it would "provide equitable and reasonable access" to its markets.
However, India is yet to take a call on extending the retaliatory tariffs or higher duties worth $235 million on 29 American goods beyond April 1 as it is a different issue, Wadhawan said.
India has been the biggest beneficiary of the GSP regime and accounted for over a quarter of the goods that got duty-free access into the USA in 2017.
The trade officials also accused New Delhi of deploying "a wide array of trade barriers that create serious negative effects on United States commerce", echoing Trump's letter to USA lawmakers.
The latest move comes as U.S. is negotiating with China over Trump's trade concerns, including massive trade deficit. Countries not covered by the GSP face USA tariffs of 2 percent and upwards.
He said in a separate letter that Turkey is no longer a "developing country based on its level of economic development". This was primarily because the economy of Turkey had improved a lot in the last four-and-a-half decades, he said.
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"The effect will be minimal at the least to moderate at the most on India's export to the US", said Anup Wadhawan, commerce secretary in the Indian ministry of commerce.
The e-commerce rules followed a drive by New Delhi to force global card payments companies such as Mastercard and Visa to move their data to India and higher tariffs on electronic products and smartphones.
Meanwhile, Trump said that he will continue to monitor if India is "providing equitable and reasonable access to its markets" and meet the GSP eligibility criteria.
Few of the items are produced in the United States as they are low in the manufacturing value chain, it added.
The USTR said: "India has implemented a wide array of trade barriers that create serious negative effects on United States commerce", but did not mention the specifics in its statement.
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