The Office of the U.S. Trade Representative made an announcement yesterday that has the potential to have a positive impact the U.S. dairy industry’s trading relationship with India. Specifically, USTR said it plans to terminate India's eligibility under the U.S. Generalized System of Preferences (GSP) program due to its failure to provide “equitable and reasonable access to its market.”
The GSP program is a trade preference program that allows certain products to enter the United States duty free from “least developed countries” that meet the GSP eligibility criteria established by Congress.
Exports to the United States from India in 2017 totaled $45.2 billion, and nearly $5.6 billion of those products came in duty free under the GSP program. If India is removed from the GSP list, U.S. duties on affected Indian imports would increase by approximately $190 million.
60 Days to Decide
However, India’s eligibility cannot be officially terminated for 60 days, so during this interim period IDFA hopes that the Indian government will agree to lower tariffs on U.S. products, including dairy, and make its import procedures less restrictive so that it can remain in the GSP program going forward.
IDFA has been urging the administration to remove India from the GSP program for some time. In comments submitted in June 2018, IDFA asked USTR to review the significant barriers to U.S. dairy exports that India has erected when considering their future participation in the GSP program and review whether to provide opportunities for them to export more dairy products into the United States. IDFA outlined several barriers to trade that India has put in place to demonstrate that India does not currently allow sufficient access to their markets for U.S. dairy.
Equitable market access is the main criteria for accepting countries into the GSP program, and IDFA believes that India, among other countries, does not meet that test. IDFA members also raised these points in a meeting with top officials of the U.S. Department of Agriculture, Secretary Sonny Perdue and Undersecretary Ted McKinney. The meeting was held in conjunction with IDFA’s strategic fly-in in December.
“We were pleased with USTR's announcement, and we will encourage the administration to require India to improve its posture towards U.S. dairy imports before agreeing to allow India to continue to be part of the GSP program,” said Michael Dykes, D.V.M., IDFA president and CEO.
Read IDFA’s comments to USTR on India here.
For more information, contact Beth Hughes, IDFA senior director of international affairs, at bhughes@idfa.org.