US intends to end preferential trade treatment for Turkey

US intends to end preferential trade treatment for Turkey

US intends to end preferential trade treatment for Turkey

The United States intends to end Turkey's and India's preferential trade treatment under a program that allowed some exports to enter the United States duty free, the U.S. Trade Representative's Office said on March 4.

Turkey is no longer eligible to participate in the Generalized System of Preferences program because it "is sufficiently economically developed," USTR said in a news release. Turkey was designated as a program beneficiary in 1975, and the trade representative's office pointed to a number of advancing economic metrics in establishing its determination.

"An increase in Gross National Income (GNI) per capita, declining poverty rates, and export diversification, by trading partner and by sector, are evidence of Turkey's higher level of economic development," it said.

USTR said in August it was reviewing Turkey's eligibility in the program after the NATO ally imposed retaliatory tariffs on U.S. goods in response to American steel and aluminum tariffs.

Removing Turkey from the program would not take effect for at least 60 days after notifications to Congress and the Turkish government, and it will be enacted by a presidential proclamation, USTR said. Trump notified Congress on March 4.

"In the four and a half decades since Turkey's designation as a GSP beneficiary developing country, Turkey's economy has grown and diversified," Trump wrote in a letter to lawmakers, adding Washington "remains committed to fair and reciprocal trade with Turkey".

Turkey is one of 120 countries that participate in the GSP, the oldest and largest U.S. trade preference program. It aims to promote economic development in beneficiary countries and territories by eliminating duties on thousands of products.

The United States imported $1.66 billion in 2017 from Turkey under the GSP program, representing 17.7 percent of total U.S. imports from Turkey, according to USTR's website.

The leading GSP import categories were vehicles and vehicle parts, jewelry and precious metals, and stone articles, the website said.

India, meanwhile, is being terminated from the program because it has failed "to provide the United States with assurances that it will provide equitable and reasonable access to its markets in numerous sectors".

India was the largest beneficiary of the system, with it covering roughly $5.69 billion in imports, according to a report issued by the Congressional Research Service in January. Turkey ranked fifth with an estimated $1.66 billion in applicable imports.

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