Published: Wed, March 06, 2019
World Media | By Cesar Oliver

U.S. intends to end preferential trade treatment for Turkey

U.S. intends to end preferential trade treatment for Turkey

US' trade preference programme, GSP, aims to promote economic development in beneficiary countries by removing duties on products.

In a statement, the Office of the U.S. Trade Representative said Turkey is "sufficiently economically developed" and should no longer benefit from preferential market access.

"Despite the fact that India was working on an extensive and reasonable trade package, the U.S. has chose to go ahead with its decision to scrap the preferential trade benefit after 60 days".

As the US and China are reportedly close to ending their trade dispute, it appears Washington is now kicking off potentially new trade wars elsewhere.

US President Donald Trump has planned to completely end India's preferential trade treatment under the Generalized System of Preferences (GSP), that could impact India's exports if it happens.

"In the four and a half decades since Turkey' s designation as a GSP beneficiary developing country, Turkey's economy has grown and diversified", Trump wrote in a letter to lawmakers, adding Washington "remains committed to fair and reciprocal trade with Turkey".

Sources in the Ministry of External Affairs, however, said that the government would continue to talk to the USA during the 60-day period after which the GSP withdrawal would come into effect, in an effort to work out a deal.

Sahai said the USA move, which would see tariffs of between 2-3 percent on the exempted goods, is most likely to hit leather, food processing, textile and few engineering goods.

The Office of the U.S. Trade Representative says the change will be enacted by presidential proclamation, but not before 60 days.

Trump has repeatedly called out India for its high tarrifs.

Mukherjee said the GSP benefits for India amounted to only $190 million a year.

The duty benefit to India on exports under preferential treatment was "relatively limited" at $190 million, with India exporting 1,900 products to the USA under the special status, he had said.

Ruhsar Pekcan tweeted on Tuesday that Turkey intends to press ahead with efforts to increase trade with the U.S.to $75 billion "without losing any momentum". "Even though the GSP (preferential treatment) is given on a non-reciprocal basis, the U.S. was seeking market access and tariff reduction in exchange during our negotiations".

In the end Trump rejected the Indian offer as inadequate, surprising New Delhi, which saw him as a dealmaker who would appreciate the openings in the Indian agricultural market that would give him bragging rights in the boonies and Middle American farm country. It is amply evident that after India opened up in 1991 on the trade front, there have been significant gains thanks to global trade, especially in services, and which fuelled double digit growth in exports during the high growth years between 2004-05 to 2012-13, leading to creation of more jobs too.

"We had worked out a meaningful package that covered the USA concerns but they made additional requests which were not acceptable at this time", he added.

Although India felt that it has arrived at a fairly meaningful offer which balanced some non-negotiable public health concerns, it does not work for the USA and "they chose to withdraw the benefits back", the commerce secretary noted.

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