The current U.S government under the leadership of Mr. Donald Trump has about to remove the India’s status of preferential trade status. In addition to India, U.S removes Turkey from the list too.
The news announced and confirmed by the United States Chief’s office on last Monday which is 4th of March 2019. The announcement came right after the letter of Trump reaches the office, the letter from the president Trump has mentioned as the preferential trade treatment to India came to end after intensive engagement occurred in-between Washington and New Delhi.
The move of scrapping India from the list o preferential trading country listing by United States came after the US and China negotiates its costly trade war that existed for the past few months. And currently both nation US and China agreed to work out their trade differences within next 90-days. For the past few months United States government under the leadership of Donald Trump’s administration taking some serious efforts to address the inequitable relationship among countries in commercial aspects.
Words from US Trade Office
On pointing the scrapping of India from its preferential trade status, the US trade representative has said as “Washington intends to terminate India’s and Turkey’s designations as beneficiary developing countries under the Generalized System of Preferences (GSP) program because they no longer comply with the statutory eligibility criteria”.
He also added as “India has failed to provide assurances that it would allow required market access, while Turkey is “sufficiently economically developed” that it no longer qualifies, India has implemented a wide array of trade barriers that create serious negative effects on United States commerce” as the main reason behind the scarping India from preferential trade agreement.
What is GSP?
GSP literally known as Generalized System of Preferences in United States of America, the program included in the Trade Act of 1974, designed to address the issue of economic growth of the developing countries and to promote their trading operation by offering preferential duty-free entry to US. Under this program around 4,800 products allowed to enter US without any duty charges. So far, there are around 129 designated countries were listed in the preferential agreement status by US.
How long it will take to implement the changes?
Based on the constitutional laws of US, the changes can’t be implemented with immediate effect. In fact, it requires the approval from the congress committee that will take about 60 days. On aware of that process, the president Donald Trump has written letters to the House of representative speaker along with the president of Senate on seeking permission on scrapping preferential status of the countries India and Turkey.
The president Trump said as “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” after sending message to end to preferential trade agreement with India
On the other hand, Trump quoted as “Trukey has grown and diversified” and there won’t be any need of implementing GSP program with Trukey.