NEW YORK: A 1970s United States trade deal that unilaterally grants products worth billions of dollars from India and other developing countries tariff-free access to the American market is set to expire on December 31, as pressure mounts from Donald Trump supporters to let it die.
Financial Times reports that the Congress last week failed to agree on renewing the Generalized System of Preferences, despite Republicans and Democrats saying they support it and will try to bring it back to life.
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But critics of the programme created to help developing nations grow their export industries argue that countries such as India have for too long abused the programme by ignoring its rules, and that past administrations have been too lax in enforcing them.
“There’s nothing developing about India or China any more — 600m people are in the middle class in India and that’s probably three or four times the size of our middle class,” said Dan DiMicco, former chief executive of steelmaker Nucor and a trade adviser to Trump. “Just because there are pockets of real poverty — and there’s no doubt about it — that’s the job of their government to take care of, not our government.”
More than 3,500 products from 120 developing countries and territories are covered by the trade deal, according to the non-partisan Congressional Research Service. In 2016 products worth $19bn were imported into the US tariff-free under the GSP, with business groups saying importers saved more than $700m in duties.
But economic nationalist supporters of the US president such as DiMicco argue that countries such as India have failed for decades to live up to their end of the bargain and grant US companies reciprocal access.
“India doesn’t qualify on any count,” Curtis Ellis, founder of the American Jobs Alliance which advocates hardline economic nationalist trade policies, wrote in an article published by Breitbart, the conservative outlet controlled by Steve Bannon, the former White House adviser.
“It routinely rips off US intellectual property and blocks US imports through a combination of high tariffs, taxes and corrupt bureaucracy.”
The Trump administration, whose support for the GSP has been lukewarm compared with that of previous administrations, has indicated it wants to see it reformed.
The office of US trade representative Robert Lighthizer, which administers the programme, on Friday declined to comment when asked by the Financial Times whether the administration supported GSP renewal.
