After China, now US to review eligibility of trade preference for India

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NEW DELHI: The United States will review if India’s exports need any preferential accessto its market, potentially impacting nearly 3,500 goods including mechanical and electrical machinery, organic and inorganic chemicals, plastics and vegetables that get duty free access to the world’s biggest market. Washington has announcedeligibility reviewof India for the Generalized System of Preferences (GSP), a sort of quota for each country at zero or low duty, along with that for Indonesia and Kazakhstan.

India is the largest beneficiary of GSP among developing countries at $5.6 billion with 3,500 products getting duty-free access to the US market. The US has been looking at imports from countries with which it runs a large tradedeficit and has already announced tariffs on $60 billion worth of Chinese imports.

The United States Trade Representative (USTR) said that it is launching a selfinitiated GSP eligibility review of India based on concerns related to its compliance with the GSP market access criterion and is also accepting two petitions related to the same criterion.

“All this is part of putting pressure on us. This is a sword hanging on us every year,” said a Delhi-based trade expert.

The petitions filed by the US dairy industry and the US medical device industry requested a review of India’s GSP benefits, given that Indian trade barriers affecting the US exports in those sectors.

India has implemented a wide array of trade barriers that create serious negative effects on the US commerce, the USTR alleged. “The US might stop the benefit this year because they don’t consider us a developing country anymore,” the trade expert added.

Congresshad last month votedto renew the GSP through 2020. “GSP provides an important tooltohelp enforcetheTrump administration’s key principles of free and fair trade acrossthe globe. The president is committed to ensure that those countrieswhich receive GSP benefitsuphold their end of the bargain by continuing to meet the eligibility criteria outlined by Congress,” said deputy US Trade representative Jeffrey Gerrish.

In October 2017, the USTR announced a new triennial process to assess GSP beneficiary country eligibility and examined the country’s policies and practices related to each of the 15 eligibility criterion established by the Congress. These include respecting arbitral awards in favour of US citizens or corporations, combating child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection, reducing barriers toservicestrade and investment and providing the US with equitable and reasonable market access.economictimes