In 2019, former president Donald Trump terminated India’s designation as a beneficiary developing nation under the Generalised System of Preference (GSP) trade programme after determining that New Delhi has not assured the US that it will provide “equitable and reasonable access” to its markets.
The GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
The issue was raised by several members of the Senate Finance Committee on Thursday during the confirmation hearing of Katherine C Tai or the position of United States Trade Representative.
“On your question on GSP in India, let me just say that if confirmed, this is very high on my radar,” Tai said, responding to a question from Senator Maria Cantwell who raised the issue of high retaliatory tariffs imposed by India on several American products after US terminated GSP privileges of India.
“What can we do to open up the Indian market to US apples and reduce the horrific tariffs that are on those apples, particularly with the Trump administration terminating the GSP programme? When would the Biden administration restore India’s GSP status and help us with apple exports?” Senator Cantwell asked.
India was the largest beneficiary of the GSP programme in 2017 when it exported USD 5.7 billion worth of goods to the US under this scheme.
India imposed retaliatory tariffs on 28 American products, including walnuts, almonds and apples from June 5, 2019, after the Trump administration revoked its preferential trade privileges.
“Coming from the Hill as I will be, to USTR, I don’t have a good answer for you right now for lack of having good briefing, just by virtue of being on the outside but it’s something that I look forward to engaging with you on robustly,” Tai said in response to the question from Cantwell.
Cantwell asked Tai about a number of Washington trade priorities including opening the Indian market for apples, increasing wheat exports, and resolving the dispute with the European Union on commercial aircraft subsidies for Airbus.
The market for Washington apples has fallen to USD 4.9 million from USD 120 million after India imposed retaliatory tariffs following the Trump administration’s unilateral steel tariffs in 2018.
India will now be requiring certification that export shipments are free of genetically engineered crops.
Apples are included under this requirement, and no genetically engineered apples are exported from the United States. Furthermore, there are no genetically engineered red delicious – the variety that accounts for most of all the apple exports to India. India may close its market to US apples in March 2021 if no agreement is reached with the United States, she said.
Cantwell asked Tai what she would do to ensure that India keeps its market open to US apples and reduces its tariffs. She also asked when the Biden administration would consider restoring India’s GSP status and whether access for apples and other US exports would be a factor.
During the hearing Senator Bill Cassidy, raised the issue of export of shrimp to India which are heavily subsidised.
“India is sending a lot of shrimp here. They heavily subsidise – I’m told – they’re shrimpers and then the EU is refusing to accept it over phytosanitary concerns,” he said.
“So we’re getting subsidised shrimp refused elsewhere because of phytosanitary concerns putting my folks out of business. If they want to compete on price, that’s fine, but make sure it’s clean, doesn’t have antibiotics, etc. but also that it’s not unfairly subsidised,” Cassidy said.
Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress. PTI LKJ AKJ
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