GSP market access Current Affairs - 2020

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India to partially open up Poultry and Diary Markets to imports from US

Ahead of President Trump’s visit by the end of February 2020, GoI has announced that it is to partially open the poultry and Diary market to imports from US.

Highlights

India will now allow imports of US turkey, chicken legs blueberries and cherries. The tarrif on Chicken legs are to be cut from 100% to 25%. The Indian Diary Market is to be opened with 5% tariff on some products. However, the diary imports will need certificates that they are not derived from animals that have consumed feeds that include blood meal, internal organs or tissues of animals.

Background

India being the largest producer of milk in the world had restricted diary imports. This was done to protect the livelihood of 80 million rural households.

In 2019, US had suspended Generalized System of Preferences after India capped the prices of medical devices such as cardiac stents, knee implants, etc. India now aims to restore the bonds with US.

Concerns

Indi is the second largest trade partner of the United States after China. However, US faces trade deficit of 23.2 million USD with India. United States is working in every possible way to reduce the trade deficit.

Recently, US announced that India is a developed country that it does not require GSP for its goods to be exported to US.

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Generalized System of Preferences: US announces eligibility review of India

The United States Trade Representative (USTR) has formally announced that it is reviewing eligibility of India, Indonesia and Kazakhstan in Generalized System of Preferences (GSP) based on concerns about countries’ compliance with program. The reviews are based on Trump administration’s new GSP country eligibility assessment process as well as GSP country eligibility petitions

Key Facts

For India, GSP country eligibility review is based on concerns related to its compliance with GSP market access criterion and two petitions related to same criterion. The petitions were filed by US dairy industry and US medical device industry requested review of India’s GSP benefits, given Indian trade barriers affecting US exports in those sectors.

For Indonesia, GSP country eligibility review is based on concerns related to its compliance with GSP market access criterion and GSP services and investment criterion. Kazakhstan’s eligibility review is based on concerns related to its compliance with the GSP worker rights criterion.

Generalized System of Preferences (GSP)

GSP is largest and oldest US trade preference programme introduced in 1976. It is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries both developing and developed countries. Under it, a wide range of industrial and agricultural products originating from certain developing countries are given preferential access to US markets. India’s case, GSP enables duty-free entry of 3,500 product lines in US markets, which benefits exporters of textiles, engineering, gems and jewellery and chemical products. The total US imports under GSP in 2017 was $21.2 billion, of which India was biggest beneficiary with $5.6 billion, followed by Thailand ($4.2 billion) and Brazil ($2.5 billion).  The US Congress in March 2018 had voted to renew GSP through 2020. In

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