On Monday, March 4, 2019, the U.S. Trade Representative (USTR), Robert Lighthizer, announced that the United States determined India and Turkey no longer comply with the eligibility criteria as beneficiary developing countries under the Generalized System of Preferences (GSP).
Under the United States GSP program, certain products can enter the United States duty-free if beneficiary developing countries meet the eligibility criteria established by Congress. GSP criteria include, among others:
- respecting arbitral awards in favor of United States citizens or corporations;
- combating child labor;
- respecting internationally recognized worker rights;
- providing adequate and effective intellectual property protection; and
- providing the United States with equitable and reasonable market access.
The United States launched an eligibility review of India’s compliance with the GSP market access criterion in April 2018. According to the USTR, India has implemented a wide array of trade barriers that create serious negative effects on U.S. commerce, and despite intensive engagement, the United States believes India has failed to take the necessary steps to meet the GSP criterion.
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 United States designated Turkey as a GSP beneficiary developing country in 1975. An increase in Gross National Income (GNI) per capita, declining poverty rates, and export diversification, by trading partner and by sector, are evidence of Turkey’s higher level of economic development.
Turkey’s termination from GSP follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market.
By statute, these changes may not take effect until at least 60 days after the notifications to Congress and the governments of India and Turkey, and will be enacted by a Presidential Proclamation.
For more information about the Generalized System of Preferences, visit USTR.
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