President Donald Trump has officially notified Congress of his intent to terminate the designation of Turkey and India as beneficiary developing countries under the Generalized System of Preferences (GSP) program. Termination means that products from these two countries will no longer receive duty-free access to the U.S. market. Official removal of these countries’ designation under the GSP program can occur 60 days after the March 4, 2019, notification to Congress; removal is thus likely to occur on or around May 3, 2019.
In his letter to Congress regarding Turkey, the president stated that the country should no longer be designated as a “developing country” since its “economy has grown and diversified. Increases in Gross National Income per capita, declining poverty rates, and export diversification by trading partner and by sector are all evidence of Turkey’s increased level of economic development.” In his letter to Congress regarding India, the president stated that “after intensive engagement between the United States and the Government of India, I have determined that India has not assured the United States that it will provide equitable and reasonable access to the markets of India.”
The GSP program is the largest and oldest U.S. trade preference program; it provides opportunities for poor and developing countries to trade favorably with the United States in an effort to develop and grow their own economies. See also U.S. Generalized System of Preference Guidebook (UPDATE: see Guidebook dated December 2019). Historically, India has been the top GSP beneficiary country, with Turkey often ranked in the top five.