Generalized System of Preferences (GSP)

The Generalized System of Preferences (GSP) is a U.S. trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories. US congress has voted to renew the GSP through 2020.

US has announced eligibility review of India, Indonesia and Kazakhstan for the Generalized System of Preferences (GSP).

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

In India’s case, GSP enables duty-free entry of 3,500 product lines, which benefits exporters of textiles, engineering, gems and jeweller and chemical products.

Review of India’s GSP was due to the fact that

  • The petitions filed by the US dairy industry and the US medical device industry requested a review of India’s GSP benefits citing that Indian trade barriers were affecting the US exports in those sectors.
  • US Trade Representative (USTR) said it is launching a self-initiated GSP eligibility review of India based on concerns related to its compliance with the GSP market access criterion and is also accepting two petitions related to the same criterion.
  • USTR alleges that India has implemented a wide array of trade barriers that create serious negative effects on US commerce. [THBL]

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