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Top US lawmakers urge President Trump to reinstate India's preferred trade status

Forty US lawmakers, members of the US Congress have urged US President Donald Trump to reinstate India’s preferential trade status.

Sep 18, 2019 15:29 IST
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Donald Trump-Modi

Forty US lawmakers, members of the US Congress have urged US President Donald Trump to reinstate India’s preferential trade status. The lawmakers led by Congressmen Jim Himes and Ron Estes submitted a letter to Trump’s trade representative Robert Lighthizer, which was signed by 26 Democrats and 18 Republicans.

The lawmakers stated that the withdrawal of India's preferential trade treatment under the Generalised System of Preferences (GSP) programme resulted in retaliatory tariffs from India, which are hurting the US industry. The top US lawmakers put forth the request to restore the trade concessions for India ahead of President Trump’s meeting with Indian PM Modi at Houston for the ‘Howdy Modi’ event.

The Trump administration ended India's designation as a beneficiary developing nation under its key Generalised System of Preferences (GSP) in June 2019. The GSP programme had allowed $5.6 billion worth of Indian exports to enter the United States duty-free.

US President ended India’s preferential treatment stating that India has failed to assure the United States that it would provide equitable and reasonable access to its markets in numerous sectors.

However, the US lawmakers have urged to revoke the decision as part of a potential trade deal between the two countries.

Generalised System of Preferences (GSP)

GSP is one of the oldest and largest US trade preference programme. The programme is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

The eligibility criteria for the beneficiary developing countries includes 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 and providing equitable and reasonable market access to the US.

The selected beneficiaries can be graduated from the GSP programme based on the factors related to economic development.

Background

US President Donald Trump is scheduled to meet Prime Minister Narendra Modi on September 22 in Houston. The two sides hope to announce a potential deal on longstanding trade issues, including GSP.

While the GSP is largely seen as a benefit to foreign developing countries, it is beneficial for American businesses and workers as well and they suffer the maximum upon its termination.

Despite losing preferential treatment, the import of India’s GSP-eligible products into the US increased by over 40 percent in June 2019, in comparison to last year.

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