Trump announces plans to end 5.6 bn preferential trade programme

US President Donald Trump has announced that he was ending Indias 56 billion trade concessions under the Generalised System of Preferences GSP programme accusing New Delhi of not providing Washington equitable and reasonable access to its marketsTrump who is on a mission to expand marker access abroad and end trade deficits made the announcement on Monday in a letter to House Speaker Nancy Pelosi and Vice President Mike Pence in his capacity as the Senate PresidentThe US Trade Representatives Office USTR said that the preferences will end in 60 days after the notification to Congress and the Indian governmentMeanwhile Trump said that he will continue to monitor if India is providing equitable and reasonable access to its markets and meet the GSP eligibility criteriaIndia had opposed proposals to end the GSP saying that it would be discriminatory arbitrary and hurt the countrys developmentIndia is the largest beneficiary of the GSP exporting goods worth 56 billion to the US under the programme Congress establishes the conditions of eligibility for GSP which include providing the US with equitable and reasonable market access protecting workers rights and combating child labourTrump wrote in his letter I am taking this step because after intensive engagement between the United States and the government of India I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of IndiaThe USTR said India has implemented a wide array of trade barriers that create serious negative effects on United States commerce but did not mention the specifics in its statementDespite intensive engagement India has failed to take the necessary steps to meet the GSP criterion it addedThe total IndiaUS trade was 1262 billion in 2017 with a 273 billion deficit for the US according to the USTR Indias total exports were worth 767 billion and the end to GSP affects only a small part of it limited to 56 billionAt a hearing held by the USTR last June on withdrawing Indias GSP the minister in charge of commerce at the Indian Embassy in Washington Puneet Roy Kundal said that withdrawing the GSP benefits would be discriminatory arbitrary and detrimental to the development finance and trade needs of India which is a vast and diverse developing country with unique challengesThe primary aim of the GSP is to help developing countries particularly in sectors where the benefits can reach the poorTrump also said that he was ending the GSP for Turkey because of its economic success and rising living standards that would no longer make it eligible for the programme that is meant to help developing countriesThe President has been on a warpath against what he said were high tariffs on US imports to India While pushing for the Reciprocal Trade Act in January he brought up Indias duty on American whiskey which he said was 150 per cent and on Harley Davidson motorcycles that he asserted he had gotten reduced from 100 to 50 per centThe decision to end the GSP may not entirely be influenced by high tariffs imposed by India on US imports The two countries have had differences over the restrictions placed on ecommerce by Amazon and on Walmart subsidiary Flipkart and on data housing by Visa and MastercardThe decision comes as the US is reported to be making headway in trade negotiations with China aimed mainly at cutting American trade deficits with a deal expected soonIronically a trade group warned that taking ending GSP for India could end up helping ChinaThe American Apparel and Footwear Association said in a written testimony that if GSP benefits are withdrawn for India as well as Indonesia and Thailand companies will have no choice but to return to sourcing from ChinaIt pointed out that Trump has threatened to impose 10 per cent punitive duties on US travel goods imports from China and ending the GSP for India means that not only will sourcing return from China but American consumers will pay far higher prices for their travel goodsThe US dairy industry was a strong advocate of ending the GSP for India citing its difficulties in exporting to IndiaShawna Morris Vice President of the National Milk Producers Federation and the US Dairy Export Council at the the June USTR hearing accused India of refusing to provide them equitable and reasonable access to its markets through unscientific sanitary and phytosanitary requirementsThese requirements by India were that the exports should not come from cows that have been given cannibalised feed that includes offal or other meat productsKundal countered that it was not an issue fo of market access but of certification given the religious cultural and moral sensitivities and India provide unimpeded market access to dairy products from all countries that met the criteriaAnother opposition came from the medical sector based on price controls on medical devices imposed by India Kundal said that these were necessitated by Indias need to 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