The Trump Administration has announced that India, the largest beneficiary of trade benefits under the Generalized System of Preferences (GSP), will be terminated as a beneficiary of the program, along with Turkey. The termination should occur in a little over sixty (60) days. The President notified Congress of his determination on March 4, 2019. Once the foreign governments are notified and the 60-day waiting period elapses, the President will issue a Proclamation formally terminating the two countries as beneficiaries.
The termination of India as a GSP beneficiary is penal, with the Administration claiming that India is not providing “equitable and reasonable access to its markets in numerous sectors.” The Administration is acting in response to complaints about India raised by members of the medical device and dairy industries. GSP-eligible imports from India accounted for $5.6 billion in imports in 2018.
Turkey is being terminated because its per capita income has been found to exceed the maximum for beneficiary countries provided under the GSP statute. Turkish products valued at $1.7 billion received GSP treatment in the past year.
The GSP is a program designed to provide duty-free treatment for designated product of “beneficiary developing countries.” Eligible products are required to be produced in the designated country, meet a 35 percent value-content requirement, and be imported directly into the United States from the beneficiary country.
Please contact us if you have any questions regarding these terminations.