The Office of the United States Trade Representative (USTR) has announced that India and Turkey will be removed from the list of beneficiary developing countries eligible for duty-free entry under the Generalized System of Preferences (GSP). By law, the President must notify Congress at least 60 days prior to the termination of GSP eligibility and must also notify the involved countries. After the 60 day notification period, the termination of GSP eligibility is enacted by a Presidential Proclamation that will include an effective date.
India is by far the largest GSP beneficiary country, accounting for over 25% of the value of GSP imports into the U.S. in 2017 ($5.6 billion). Major sectors include articles of iron and steel, organic chemicals, plastics, and machinery. For years, several domestic industries (particularly the U.S. dairy and medical devices industries) have complained that India denies reasonable market access for U.S. exports. Equitable and reasonable market access is a criterion for GSP eligibility. The 2018 USTR country review of India determined that India failed this condition.
In 2017, Turkey exported $1.66 billion in GSP-eligible goods to United States, principally, automobile parts, jewelry, and metals. The USTR press release stated that Turkey’s economic development warranted its graduation from the GSP program.
Both India and Turkey have been beneficiary developing countries since GSP’s inception in 1976.
GDLSK is monitoring these developments. If you have any questions, please contact Joseph Spraragen (JSpraragen@GDLSK.com) or any of our attorneys.