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USTR Initiates GSP Eligibility Reviews for India, Indonesia and Kazakhstan

India, Indonesia and Kazakhstan are under review for the trade privileges they enjoy as part of the U.S. Generalized System of Preferences (GSP) program, as the Office of the U.S. Trade Representative has expressed concerns about the countries’ compliance with several of its rules.

The reviews are based on the Trump administration’s new GSP country eligibility assessment process and GSP country eligibility petitions.

“GSP provides an important tool to help enforce the Trump administration’s key principles of free and fair trade across the globe,” Deputy USTR Jeffrey Gerrish said. “The President is committed to ensuring that those countries who receive GSP benefits uphold their end of the bargain by continuing to meet the eligibility criteria outlined by Congress. We hope that India, Indonesia and Kazakhstan will work with us to address the concerns that led to these new reviews.”

India’s GSP eligibility review is related to its compliance with the program’s market access criterion, according to USTR, which is accepting two petitions related to the same rules filed by the U.S. dairy industry and the U.S. medical device industry over alleged trade barriers affecting U.S. exports in those sectors. The acceptance of these petitions and the GSP self-initiated review will result in one overall review of India’s compliance with the GSP market access criterion, USTR noted.

Last month, the U.S. challenged India’s “export subsidy programs” as running afoul of World Trade Organization rules and providing “an unfair competitive advantage to recipients and WTO rules expressly prohibit them.”

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For Indonesia, the review is based on issues surrounding the country’s compliance with the GSP market access stipulations, and services and investment specifications. USTR said a range of trade and investment barriers Indonesia has implemented “create serious negative effects on U.S. commerce.”

Kazakhstan’s eligibility review is due to concerns over its compliance with the GSP worker rights required standards. USTR has accepted a petition from the AFL-CIO that alleges Kazakhstan has not taken steps to afford internationally recognized worker rights, including the right to freedom of association and the right to bargain collectively. The petition also alleges that Kazakhstan actively restricts the right to form trade unions and employer associations. Serious concerns about restrictive legislation and the harassment of independent labor leaders have been raised at the International Labor Organization, according to USTR.

The GSP is the largest and oldest U.S. trade preference program and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. Congress voted last month to renew the GSP through 2020.

In October, USTR announced a new triennial process to assess GSP beneficiary country eligibility. The first assessment period covered 25 Asian and Pacific island beneficiary countries. For each such country, USTR and other federal agencies examined the country’s policies and practices in 15 eligibility criteria established by Congress. These included respecting arbitral awards in favor of U.S. citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, reducing barriers to services trade and investment, and providing the U.S. with equitable and reasonable market access.

A public hearing and comment period for the new GSP reviews of India, Indonesia and Kazakhstan will be announced in an upcoming Federal Register notice.

The next GSP assessment process will begin his fall and will cover beneficiary countries in Eastern Europe, the Middle East, North Africa, and the Western Hemisphere, according to USTR.