US threatens to withdraw tariff benefits to India
financialexpress.com
Economy Bureau & Agencies
New Delhi, Aug 8 Washington seems to be on a confrontation course with WTO member countries that have stymied its unfair bid to gain market access without effecting a cut in trade-distorting domestic support. India, Russia and Brazil are among a group of 13 countries that could lose preferential trade benefits granted by the US under a review announced by its administration.
Agencies said the administration’s review followed complaints from some in the Congress that countries such as Brazil and India, which get tariff concessions from the US under the generalised system of preferences (GSP) programme, have not been helpful in efforts to achieve agreement in the Doha Round of global trade talks.
Commerce secretary SN Menon, however, told FE that India has not received any formal communication from the US about the move to discontinue the GSP benefit. Asked whether the US move could be linked to the India-US discord in the WTO talks, Menon said it could not be. “This could be part of the normal review (of GSP programme) that they (the US) do every year,” the official said.
India's textile products are not covered by the US’s GSP benefits. EU accords GSP benefits to Indian garments and home textiles, but New Delhi has already graduated out of GSP for other textiles products like yarn and fabrics.
US’ trade representative Susan Schwab was quoted as saying the administration wanted to determine whether certain countries out of a total of 133 should be excluded from the country’s GSP programme.
“One of the concerns that Congress has raised is that GSP benefits go largely to a few countries, while many developing countries are not trading much under the programme. We want to ensure that we are operating the programme as Congress intended,” Schwab said.
US Senate finance committee chairman Charles Grassley said in July the current GSP programme, which expires on December 31, should not provide benefits to countries such as India and Brazil.
“Countries that don’t want to give us access to their markets in WTO negotiations, why should we continue to give them preferential treatment?” asked Grassley, whose committee would have jurisdiction over any legislation to extend the GSP programme.
The administration has asked for public comments on whether the duty-free trade benefits should be limited or withdrawn for countries whose shipments to the US exceeded $100 million in 2005 and met one of two criteria. The other two criteria were that the country was classified as an upper-middle-income economy by the World Bank in 2005 or the country’s total exports in 2005 equalled 0.25% or more of all global exports.
The countries participating in US' GSP programme that meet those guidelines are Argentina, Brazil, Croatia, India, Indonesia, Kazahstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela, according to information supplied by Schwab's office. |
