US President Donald Trump’s recent proclamation terminating the designation of Turkey as a beneficiary nation under the Generalised System of Preferences (GSP) is ominous for India which had been served a 60-day notice on March 3 for similar withdrawal.
The deadline has expired but there is no official word from the US. Indeed, GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
On the eve of the end of the notice period, 25 US lawmakers from House of Representatives made a last-ditch effort to convince the Trump administration from going ahead with its decision. They urged US Trade Representative Robert Lighthizer to continue negotiating a deal that protects and promote jobs that rely on trade both imports and exports with India.
They argued that terminating GSP for India would hurt American companies seeking to expand their exports to India. Trump had said in a letter to Congress that “India’s termination from GSP will follow its failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors.”
The wise course for the Trump administration would be to wait until a new government takes office in New Delhi. But impulsive Trump is characterised by knee-jerk reactions and there is no knowing whether he would hold his hand. Reaching a comprehensive solution that benefits both the US import and export interests would be the key for which comprehensive talks would be required and are being sought.
