44 influential US lawmakers urge US Prez Trump admin to reinstate GSP status for India

WASHINGTON DC: Ahead of Prime Minister Narendra Modi’s visit to the US, a bipartisan group of 44 influential lawmakers has urged the Trump administration to reinstate India’s designation as a beneficiary developing nation under the key GSP trade programme as part of a potential trade deal between the two countries.

The Trump administration terminated India’s designation as a beneficiary developing nation under the Generalized System of Preferences (GSP) on June 5.

The GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.

In a letter to US Trade Representative Robert Lighthizer, the House of Representatives members suggested an “early harvest” approach that “would ensure that long-sought market access gains for US industries are not held up by negotiations over remaining issues”.

US President Donald Trump and Prime Minister Narendra Modi will meet on September 22 in Houston and the two sides hope to announce a potential deal on longstanding trade issues, including the GSP, a media report said.

At the “Howdy Modi!” Indian-american diaspora event in Houston, prime minister Modi and president Trump will be present, reflecting the strong support for Usindia relations.

Led by Congressmen Jim Himes and Ron Estes, the letter to Lighthizer has been signed by 26 Democrats and 18 Republicans, showing the strong, bipartisan support for reinstating the GSP benefits for imports from India.

“Companies are telling Congress about the American costs - both in dollars and jobs - of lost GSP eligibility for India,” said Dan Anthony, executive director of the Coalition for GSP on Tuesday.

“The letter shows Congress’ strong, bipartisan support for swift action to reinstate GSP for India and to help constituents that depend on two-way trade,” he said.

While GSP often is seen as a benefit to foreign countries, it is American businesses and workers that have suffered most from its termination to date.

Despite facing higher tariffs due to lost GSP, imports from India of (previously) Gsp-eligible products increased over 40 per cent in June/july 2019 compared to a year earlier, likely the result of companies shifting sourcing away from China, Coalition for GSP said in a statement. “Indian exporters are thriving while American companies are stuck paying USD 1 million a day in new tariffs,” said Anthony.

The letter notes that costs of GSP termination “are real for our constituents and growing every day”. The Coalition for GSP’S latest data shows that loss of GSP for India cost American companies about USD 30 million in July.

In the letter, the lawmakers said that they have a strong desire to see the GSP eligibility for India reinstated.