Trump terminates preferential trade status to India, Turkey
- Author: Eleanor Harrison Mar 06, 2019,
Mar 06, 2019, 0:36
These issues related to market access for various agriculture and animal husbandry products, relaxation and easing of procedures related to issues like telecom testing and conformity assessment, and tariff reduction on ICT products.The US Department of Commerce engaged with various government departments concerned with these issues, and India was able to offer a very meaningful way forward on nearly all the US requests.In a few instances, specific US requests were not found reasonable and doable in light of public welfare concerns and considering India's developing country status and its national interest. Accordingly, India conveyed willingness to extend duty concessions on specific items in which there is a clear U.S. interest.
India's commerce ministry says it will not try to hold onto its preferential zero-tariffs status with the United States after Washington chose to drop it from its Generalized System of Preferences program.
However, "trade talks with United States will continue, everything is on the table", Mr Wadhawan added. "India's termination from GSP follows its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors", the statement added.
The two countries have also not held the India-US Trade Policy Forum - the only trade dialogue between both countries - for over a year now.
India, however, "has implemented a wide array of trade barriers that create serious negative effects on United States commerce", the statement said. India's total exports were worth $76.7 billion and the end to GSP affects only a small part of it limited to $5.6 billion. Commerce Secretary Anup Wadhawan told the media Tuesday that the withdrawal will not have much impact on India's exports to the U.S., which stand at around $40 billion.
GSP is a preferential tariff system extended by developed countries to developing countries, also known as beneficiary countries, to grow their economy.
Trump, who has vowed to reduce United States trade deficits, has repeatedly called out India for its high tariffs. While pushing for the Reciprocal Trade Act in January, he brought up India's duty on American whiskey, which he said was 150 per cent and on Harley Davidson motorcycles that he asserted he had got reduced from 100 to 50 per cent.
India makes use of concessions on about 1,800 products of the 3,700 the GSP covers and goods from sectors such as chemicals and engineering are exempt from USA tariffs under the scheme.
Trump's targetting of what he considers imbalanced trade relationships has sparked a trade war with Beijing that has dragged on for almost a year.
Trade relations between the United States and Turkey have been tense since a year ago, when Trump authorised the doubling of steel and aluminium tariffs on Ankara, up to 50 and 20 percent, respectively that resulted in the Turkish lira falling to a historic new low. It would fall further because of India's rising demand for energy and civilian aircraft, it said. While it is not clear whether India will take retaliatory action, the world's fifth-largest economy has indicated that retaliatory tariffs will be kept out of current discussions.
President Donald Trump sent letters to Congress and the Turkish and Indian governments to notify them of the changes, setting off a 60-day countdown after which they will take effect via presidential proclamation. Some of the exports from India that will be affected include handicrafts, farm and marine products.