Trump decides to withdraw India from GSP program list

DN Bureau

United States President Donald Trump on Monday announced his decision to withdraw India from the list of countries enjoying the Generalised System of Preferences (GSP) program on goods exported to the US.

United States President Donald Trump
United States President Donald Trump

Washington DC: United States President Donald Trump on Monday announced his decision to withdraw India from the list of countries enjoying the Generalised System of Preferences (GSP) program on goods exported to the US.

Trump said the decision was taken as India no longer comply with the statutory eligibility criteria. 

Under the GSP or zero-tariff policy measures, India enjoys tariff concession costing to USD 5.6 billion of exports to the US. India has been the world's largest beneficiary of the GSP scheme that has been in force since the 1970s.

In a letter to the Speaker of the House of Representatives and the President of the Senate, the US President wrote: “In accordance with Section 502(f)(2) of the Trade Act of 1974, as amended (Trade Act) (19 U.S.C 2462(f)(2)), I am providing notice of my intent to terminate the designation of India as a beneficiary developing country under the Generalised System of Preferences (GSP) program.”

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“I am taking this step because, after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India as set forth in Section 502(c)(4) of the Trade Act (19 U.S.C. 2462(c)(4)),” Trump added.

“I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria,” the letter further read.

According to reports, the move to withdraw the GSP program marks a draconian action taken by Trump-led US government to reduce the US deficit with large economies.

Aiming to reduce the US trade deficits, Trump many times has designated India as a ‘high tariff nation’ and called out to reduce the heavy duties that New Delhi imposes on goods imported from the United States.

A press statement released by the US Trade Representative's Office noted, “The United States launched an eligibility review of India’s compliance with the GSP market access criterion in April 2018. India has implemented a wide array of trade barriers that create serious negative effects on United States commerce.  Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion.”

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Under the United States GSP program, 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.  (ANI)

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