US bill to extend trade programme of which India biggest beneficiary
In 2016, India was the top beneficiary of the Generalised System of Preferences (GSP) programme.world Updated: Feb 09, 2018 22:09 IST
A legislation has been introduced in the US House of Representatives that seeks to extend a trade promotion programme of which India was the largest beneficiary and had waited for word about its fate after it expired the on the midnight of December 31.
The Generalised System of Preferences (GSP) programme allows select developing countries to export some products duty-free to the US. India was its top beneficiary in 2016, exporting goods worth $4.7 billion to the US under GSP, equal in worth to nearly 10% of India’s exports to the US under normal trade relations of $41.36 bn.
There were concerns among Indian trade officials and companies that the Trump administration’s stress on promoting American companies and cutting trade deficit could alter the programme, or let it remain lapsed, in ways that could deny India the advantages it had enjoyed for years.
The bill, proposing to extend the programme by three years, was introduced by trade subcommittee chairman Dave Reichert, ways and means chairman Kevin Brady and Jackie Walorski from the Republican side and ways and means ranking member Richard Neal and Trade Subcommittee ranking member Bill Pascrell, both Democrats.
The legislation, which New Delhi will be watching closely, also seeks to introduce a new reporting requirement that will improve the effectiveness of Congressional oversight of enforcement of the eligibility criteria, the impact of which on India was not clear. Some lawmakers have sought to drop India and other countries they believe do not need the support any more, and focus instead on least developing countries.
It was also not clear yet if India’s continued inclusion on the list of beneficiary countries will be made conditional, in return for trade and tariff concessions in other sectors of bilateral trade.
But lawmakers who introduced the bill intend to take a hard look at the list. “The GSP eligibility criteria provide an important enforcement tool to require our trading partners to meet standards established by Congress in regard to opening their markets to US goods and services, intellectual property protection, and child labour and worker rights,” Chairman Reichert said in a statement announcing the introduction of the bill.
“The legislation we introduced today includes a new reporting requirement that will improve the effectiveness of Congressional oversight of enforcement of the eligibility criteria.”
A paper produced in December 2017 for the consideration of lawmakers by the Congressional Research Services, a non-partisan body just days before the last programme was to lapse said, “In recent years, GSP renewal has been somewhat controversial. Members of Congress have held a range of views on whether or not to continue to include emerging market developing countries (eg, India, Brazil) as beneficiaries, or to limit the programme to least-developed countries.”
In the terminology of the programme, countries that are not felt to be in need any more of support are “graduated”, taken off the list. Russia, Seychelles, Uruguay and Venezuela were dropped in recent years.
First Published: Feb 09, 2018 22:09 IST