American Lawmakers Urge Trump Admin to Reinstate GSP for IndiaTop Stories

September 18, 2019 12:45
American Lawmakers Urge Trump Admin to Reinstate GSP for India

(Image source from: DW)

Ahead of Prime Minister Narendra Modi and President Donald Trump’s meeting at ‘Howdy Modi’ event, a group of 44 influential United States lawmakers has urged the Trump administration to reinstate India’s designation as a beneficiary developing nation under the key Generalized System of preferences (GSP) trade programme as part of a potential trade deal between the two countries.

India’s designation as a beneficiary developing nation under the GSP was terminated in June by the Trump administration.

The GSP is the U.S. trade programme designed to promote economic development by providing duty-free entry for thousands of products from designated beneficiary countries and territories.

                       (Image source from: Twitter/ANI)

The letter, led by Congressmen Jim Himes and Ron Estes, to U.S. Trade Representative Robert Lighthizer has been signed by 26 Democrats and 18 Republicans, showing the strong, bipartisan support for reinstating GSP benefits for imports from India.

Suggesting am early harvest approach, the House members said it would ensure that long-sought market access gains for U.S. industries are not held up by negotiations over remaining issues.

The executive director of the Coalition for GSP Dan Anthony said the companies are telling Congress about the American costs - both in dollars and jobs - of lost GSP eligibility for India.

The letter shows Congress' strong, bipartisan support for swift action to reinstate GSP for India and to help constituents that depend on two-way trade, he added.

According to reports, American businesses and workers have suffered the most from GSP termination to date.

Despite facing higher tariffs due to lost GSP, imports from India of (previously) GSP-eligible products increased over 40 per cent in June/July 2019 compared to a year earlier, likely the result of companies shifting sourcing away from China, Coalition for GSP said in a statement.

Anthony in a statement, said:

Indian exporters are thriving while American companies are stuck paying USD 1 million a day in new tariffs. The letter notes that costs of GSP termination are real for our constituents and growing every day.

The Coalition for GSP's latest data shows that loss of GSP for India cost American companies about USD 30 million in July.

In the letter, the lawmakers put down their strong desire to see GSP eligibility for India reinstated. It said:

“Should there be progress in negotiations, we hope you will use the tools provided by the GSP statute as warranted, such as partial reinstatement”.

Just as U.S. industries are harmed by lack of fair and reciprocal access to India's market, American companies and workers also are harmed by new tariffs due to GSP termination, the lawmakers wrote.

The costs are real for our constituents and growing every day. We urge you to continue negotiations and consider an early harvest to help American jobs that depend on two-way trade between the United States and India.

Noting that the U.S. has licit concerns against India, the lawmakers wrote those policies negatively affect U.S. companies trying to access its market, as well as several longstanding issues that have been subject to intergovernmental talks for years.  

As you know, several US industries filed petitions under GSP's market access criterion, which were accepted for review in April 2018. Ultimately, failure to make sufficient progress on the issues led to termination of India's GSP eligibility on June 5, 2019.

The Congressmen said that they take these grievances solemnly and share the administration's strong desire to see them resolved.

They also said they are encouraged to see continued engagement between the administration and the Narendra Modi government, including visits by senior Office of the United States Trade Representative and Indian officials over the summer.

The Congressmen wrote in the letter:

The change in government provides a fresh opportunity to address outstanding concerns, and we hope that new Indian officials will offer concrete solutions that improve market access for American companies and workers.

Under the GSP programme, almost 2,000 products including can enter the U.S. duty-free if the beneficiary developing countries conform to the eligibility criteria established by U.S. Congress.

According to a Congressional Research Service report issued in January, India was the largest beneficiary of the programme in 2017 with USD 5.7 billion in imports to the U.S. given duty-free status. The Trump administration had initiated an eligibility review of India's compliance with the GSP market access criterion in April 2018.

By Sowmya Sangam

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