At the direction of President Donald Trump, US Trade Representative Robert Lighthizer has announced that the United States intends to terminate India’s and Turkey’s designations as beneficiary developing countries under the Generalized System of Preferences (GSP) program because they no longer comply with the statutory eligibility criteria.
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, according to Mr. Lighthizer. 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.
The US 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, as stated by the US Trade Representative.
Turkish Trade Minister Ruhsar Pekcan said that Turkey’s removal of the program contradicts both countries’ trade target of $75 billion, adding that this move will negatively affect small and medium-scale US firms.
Meanwhile, Turkey was benefitting from duty-free automotive exports to the US under this program and, with Turkey’s removal from the GSP, its automotive exports to the US will be subject to a 2.5 percent duty, according to an automotive industry representative quoted by Reuters.