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India plays down Trump decision to remove US trade privileges

Donald Trump

After imposing unilateral trade measures separately on China and Mexico during the past seven days, President Trump opened another front targeting India this time.

The Trump administration argues that New Delhi has failed to assure America that it will provide equitable and reasonable access to its markets in numerous sectors. "Accordingly, it is appropriate to terminate India's designation as a beneficiary developing country effective June 5, 2019", Trump said.

The presidential proclamation, however, did not reveal/ suggest the areas in which India had denied market access. The US is one of India's largest trading partners.

In a relatively tame response to the announcement from Washington on Friday, the Indian government said it was "unfortunate" that its attempts to resolve significant USA requests had not been accepted.

However, it said that India, like other nations, shall always uphold its national interests in these matters. "We have significant development imperatives and concerns and our people aspire for better standards of living. This will remain the guiding factor in the government's approach", the press release added.

The Generalized System of Preference (GSP) is the largest and oldest USA trade preference program and is created to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. President Trump though forgoes all such strategic visions and diplomatic niceties as he holds up trade as the principle issue before his base to claim the USA has been shortchanged and indeed sold short by previous administrations, while pressing countries such as China and India to import more U.S produce and buy more American goods.

The Enabling Clause was adopted at the end of the Tokyo Round of the GATT (General Agreement on Tariffs and Trade) negotiations in 1979.

But President Trump is never bothered with multilaterally- agreed trade rules.

Other sticking points for the U.S. during discussions included issues related to market access for various agriculture and animal husbandry products and relaxation or easing of procedures related to issues like telecom testing or conformity assessment.

More than the market access concessions in India, the USA does not want India to strengthen its farm and other sectors, especially the digital sector.

The American Apparel and Footwear Association said in written testimony to the USTR that if GSP benefits are withdrawn for India as well as Indonesia and Thailand, US "companies will have no choice but to return to sourcing from China".

That concession is now over as President Trump bears down on what he believes are American handouts to countries that are now trending towards middle-income or developed status, with some of them being "ungrateful" to boot. American importers will pay more, while some American exporters will continue to face current market access barriers in India and others, including farmers, are very likely to be subject to new retaliatory tariff, Anthony said. United States firms have opposed such legislation in various parts of the world. Under the GSP programme, certain products can enter the U.S. duty-free if beneficiary developing countries meet the eligibility criteria established by its Congress, according to The Indian Express.