A group of 44 US lawmakers on Tuesday urged the Donald Trump administration to reinstate preferential trade treatment for India under the Generalized System of Preferences programme.
The United States government had terminated the designation of India as a beneficiary developing country under the programme in June, claiming that India had not assured the US that it will “provide equitable and reasonable access to its markets”.
India was the largest beneficiary of the GSP programme in 2017, which allowed for $5.6 billion, around Rs 3,896 crore, worth of Indian exports to enter the country duty-free. Under the GSP programme, certain products can enter the US duty-free if beneficiary developing countries meet the eligibility criteria established by its Congress.
Members of the US Congress, in a letter to US Trade Representative Robert Lighthizer, said the costs of the GSP termination were real for their constituents and only growing every day. A US-based group of businesses, trade associations and consumer organisations that advocates for the renewal of GSP, the Coalition for GSP, said that the termination of the programme for India cost American companies about $30 million in July, PTI reported.
The letter said they wanted to see the programme reinstated for India. “Should there be progress in negotiations, we hope you will use the tools provided by the GSP statute as warranted, such as partial reinstatement,” the letter said. “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.”
An “early harvest” approach would ensure that “long-sought market access gains for US industries” are not held up by negotiations over other matters, and would provide relief for both US importers and exporters. “Just as US 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 letter added.
The letter also observed that the US had legitimate concerns about Indian policies that negatively affected American companies that were trying to access the Indian market. “As you know, several US industries filed petitions under GSP’s market access criterion, which were accepted for review in April 2018,” the Congress members said. “Ultimately, failure to make sufficient progress on the issues led to termination of India’s GSP eligibility on June 5, 2019.” They added that they hoped the government that took charge in May would address the outstanding concerns and offer concrete solutions.
The letter was signed by 26 Democrats and 18 Republicans.
“Companies are telling Congress about the American costs – both in dollars and jobs – of lost GSP eligibility for India,” Executive Director of the Coalition for GSP Dan Anthony said. “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: “Indian exporters are thriving while American companies are stuck paying USD 1 million a day in new tariffs.”