GENERALIZED SYSTEM OF PREFERENCE
26, Jun 2019
Prelims level : International Mains level : Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
- The Generalized System of Preference (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.
- On March 4, Trump announced that the US intends to terminate India’s designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3. Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress.
- India was the largest beneficiary of the programme in 2017 with USD 5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with USD 1.7 billion in covered imports. The GSP criteria includes, among others, respecting arbitral awards in favour of the US citizens or corporations, combating child labour, respecting internationally recognised worker rights, providing adequate and effective intellectual property protection, and providing the US with equitable and reasonable market access.