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Generalized System of Preference (GSP)
Why is it in news?
- A group of 25 influential American lawmakers urged the U.S. Trade Representative that U.S. should not terminate the GSP programme with India after the expiry of the 60-day notice period.
More in news
- Expansion in India: This requested because companies seeking to expand their exports to India could be hit.
- Generalized System of Preference (GSP): GSP is the largest and oldest U.S. trade preference programme designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
- Intension of termination:(1) In March this year, President Donald Trump announced that the U.S. intended to terminate India’s designations as a beneficiary developing country under the GSP programme.(2) Termination announced because of India’s failure to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors.(3) The 60-day notice period ended on May 3.
- What they requested?(1) The 25 members of the U.S. House of Representatives urged U.S. Trade Representative to continue negotiating a deal that protects and promotes jobs that rely on trade-both imports and exports-with India.(2) They argued that terminating GSP for India would hurt American companies seeking to expand their exports to India.
- Possible impacts:(1) American companies that rely on duty-free treatment for India under the GSP will pay hundreds of millions of dollars annually in new taxes.(2) In the past, even temporary lapses in such benefits have caused companies to lay off workers, cut salaries and benefits, and delay or cancel job-creating investments in the United States.
Source
The Hindu