Trump de-lists India as preferential trade partner

Mar 06, 2019, 00:39
Trump de-lists India as preferential trade partner

FILE PHOTO: U.S. President Donald Trump holds a bilateral meeting with India's Prime Minister Narendra Modi alongside the ASEAN Summit in Manila, Philippines November 13, 2017.

India's commerce ministry says it will not try to hold onto its preferential zero-tariffs status with the United States after Washington made a decision to drop it from its Generalized System of Preferences program.

The US goods trade deficit with India was $22.9 billion in 2017.

It pointed out that Trump has threatened to impose 10 per cent punitive duties on United States travel goods imports from China and ending the GSP for India "means that not only will sourcing return from China, but American consumers will pay far higher prices for their travel goods".

"The United States has announced a decision to deprive Turkey of preferential access to the U.S. market within the GSP [Generalised System of Preferences] framework, which the USA has been revising since last August".

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Monday's decision came as Washington and Beijing seek to negotiate an exit to the Trump administration's most high-profile and costly trade battle. U.S. services a majority of the Indian medical devices market and only recently domestic medical equipment makers have started to report higher sales after the price cap.

"GSP withdrawal will not have a significant impact on India's exports to the U.S.", the secretary told reporters here.

In a separate letter, Trump also informed the Congress of his intent to terminate the GSP beneficiary designation of Turkey.

U.S. trade officials said Mr Trump's measure would take 60 days to come into effect after official notifications to Congress and the Indian government. "In a few instances, specific U.S. requests were not found reasonable and doable at this time by the departments concerned, in light of public welfare concerns reflective of India's developing country status and its national interest", Wadhawan said.

"We have been pointing out to them that USA exports to India have gone up by 30% in the past year and this has come in a globally depressed market". This includes data localization, tariffs that India charges US imports and new e-commerce rules.

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During the recently concluded Trade Policy Forum talks, United States commerce secretary Wilbur Ross had also raised concerns regarding new trade barriers created by India, hinting at the stringent e-commerce rules that have affected United States companies, including Inc. and Flipkart owner Walmart Inc.

India was ready to address United States concerns regarding medical devices in principle, by putting in place a suitable trade margin approach in a reasonable time-frame to balance concerns about fair pricing for the consumers and adequate remuneration for the suppliers.

"Despite intensive engagement, India has failed to take the necessary steps to meet the GSP criterion", it added. The products include motor vehicle parts, jewelry, handicrafts, carpets, marine produce and a range of raw materials such as granite (Aside: the Vietnam Memorial is built from granite imported from India).

He said: "Discussions are on with the United States, and given cordial and strong ties, (we are) keeping retaliatory tariffs out of it".

Few of the items are produced in the United States as they are low in the manufacturing value chain, it added. "GSP is especially important to USA small businesses, many of which rely on the programs' duty savings to stay competitive".

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