Trump plans to end India's preferential trade treatment

US President Donald Trump

US President Donald Trump

India will not react hastily and has no immediate plans to retaliate against Washington after President Donald Trump withdrew its designation as a beneficiary of the Generalized System of Preferences, a top trade official said. "In particular, in the four and a half decades since Turkey's designation as a GSP beneficiary developing country, Turkey's economy has grown and diversified", the letter said.

"Notably, Mr. Trump's letter to the two Congressional leaders also says, 'I will continue to assess whether the Government of India is providing equitable and reasonable access to its markets, in accordance with the GSP eligibility criteria".

India is the world's largest beneficiary of the GSP program and ending its participation would be the strongest punitive action for the South Asian nation since Trump took office in 2017.

India was the largest beneficiary of the program in 2017 with $5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January.

The changes may not take effect until at least 60 days after the notifications to United States congress and the governments of India and Turkey.

Turkey's termination from GSP followed a finding that it was sufficiently economically developed and should no longer benefit from preferential market access to the U.S. market, the statement said.

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The United States intends to end Turkey's preferential trade treatment under the programme that allowed some exports to enter the country duty-free.

The GSP, the largest and oldest United States trade preference programme, is created to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

The move follows India's "failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors", the US Trade Representative's (USTR) office said in a statement.

Most of the exports were intermediate goods not produced in the USA because they were low in the manufacturing value chain, it added. Turkey is one of 120 countries that participate in the GSP, the oldest and largest United States trade preference programme.

The trade officials also accused New Delhi of deploying "a wide array of trade barriers that create serious negative effects on United States commerce", echoing Trump's letter to USA lawmakers.

The change for India came after "intensive engagement" between New Delhi and Washington, Trump wrote in one letter, the text of which was released by the White House.

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