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US to scrap special status for Turkey and India in attempt to end trade war with China

Certain products from the two countries will no longer be imported to the US duty-free.

President Donald Trump delivers remarks at the National Association of Attorneys General Donald Trump speaks at the National Association of Attorneys General in the White House on Monday Source: SIPA USA/PA Images

THE US INTENDS to scrap a preferential trade status granted to India and Turkey which allows certain products from the two countries to be imported duty-free.

The Office of the US Trade Representative announced it would end the countries’ designations as beneficiary developing countries as part of what the ‘Generalised System of Preferences’ programme.

Under the programme, certain products can enter the US duty-free if countries meet an eligibility criteria, including “providing the United States with equitable and reasonable market access”.

In a statement, the office said that the two countries “no longer comply with the statutory eligibility criteria” for the programme.

It added that India has failed to provide assurances that it would allow the US the required market access, and “has implemented a wide array of trade barriers that create serious negative effects on United States commerce”.

In response, India said the impact on its exports to the US would be minor, claiming just €4.95 billion of its €70 billion in exports to the US are covered by GSP.

Meanwhile, the US said that Turkey was now considered “sufficiently economically developed” to have “graduated” from the programme, having first been designated a GSP beneficiary in 1975.

Donald Trump said the country’s economy “has grown and diversified”, and noted that Istanbul has already “graduated from other developed countries’ GSP programmes”.

The changes cannot take effect for at least 60 days, after the US House of Congress and the affected countries were notified, a process that started on Monday when Trump wrote letters to the speaker of the House and the president of the Senate.

The move comes as the US and China seek to negotiate an exit from a costly trade war that is part of the Trump administration’s efforts to address what it views as inequitable commercial relationships with other states.

Under an agreement taking shape, Beijing would lower some barriers on US companies’ operations in China and purchase large amounts American agricultural and energy goods if the United States agreed to lower most of the tariffs in return.

However, reports have suggested that significant details of the deal remained unresolved.

With additional reporting from - © AFP 2019

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