According to the Office of the U.S. Trade Representative (“USTR”), neither India nor Turkey meet the statutory eligibility criteria to continue as beneficiary countries under the GSP program. USTR has found that Turkey is “sufficiently economically developed and should no longer benefit from preferential market access to the United States market.” With respect to India, USTR concluded that the country failed to provide “equitable and reasonable access to its markets in numerous sectors.” India is the largest single beneficiary of the GSP program, with GSP-eligible imports worth $5-6 billion.

The Indian GSP eligibility determination was the result of a review of India’s GSP eligibility initiated in April 2018. Six months earlier, USTR announced new enforcement measures for GSP, including a triennial review process for each beneficiary country examining that country’s compliance with the 15 eligibility criteria established by Congress. One of those criteria is that the GSP beneficiary country must provide the United States with equitable and reasonable market access. In its latest pronouncement, USTR explained that “intensive” discussions with India regarding its trade barriers, particularly in the dairy and medical device industries, had been unsuccessful. In a statement from the Ministry of Commerce and Industry on Tuesday, India rejected the United States’ characterization of the negotiations, claiming that it was “agreeable to a very meaningful, mutual acceptable package.”

Monday’s notice to Congress marks the beginning of a 60-day waiting period before duty-free treatment of the GSP-eligible imports from Turkey and India will end.

The USTR promotes the GSP program as providing opportunities for many of the world’s developing countries to use trade to grow their economies and climb out of poverty. This program can also help U.S. manufacturers source affordable components from GSP countries. “GSP is especially important to U.S. small businesses, many of which rely on the programs’ duty savings to stay competitive.” See link here.

A hearing has been set at the USTR in Washington, D.C. for September 26^th and 27^th with prehearing and posthearing comments being due by September 12^th and October 17^th respectively. Petitions to modify the list of articles eligible for duty-free treatment under the GSP and new petitions to review the GSP status of any beneficiary developing country are due by October 17^th. The USTR will announce decisions on the petitions accepted for review, along with an opportunity to provide comments, at a later date.