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Turkey’s Duty Benefits Under GSP Trade Program Facing Scrutiny

Turkey’s eligibility to receive duty benefits as part of the U.S. Generalized System of Preferences (GSP) program, is being called into question.

The Office of the United States Trade Representative (USTR) has instituted a review over concerns that Turkey may be out of compliance with what’s required for the program, specifically where the GSP market access criterion is concerned.

One of 15 defined by Congress in the statute authorizing the GSP program, the market access stipulation covers the extent that beneficiary countries have assured the U.S. reasonable and equitable access to their markets.

Turkey has imposed additional tariffs on $1.78 billion of U.S. imports only and not to other trading partners, which has been part of the cause for concern. The U.S. imported $1.66 billion in 2017 from Turkey under the GSP program, representing 17.7% of total U.S. imports from Turkey.

Beyond that, the White House announced sanctions last month freezing the assets of the Turkish interior and justice ministers in protest against Turkey’s detention of American pastor, Andrew Brunson. On Saturday, Turkish President Recep Tayyip Erdogan said he was ordering reciprocal sanctions against two U.S. officials in retaliation for U.S. measures against two of his ministers.

The U.S. has sought Brunson’s release since his detention in 2016 on charges of espionage and assisting terrorist groups. U.S. officials say Brunson is innocent and being held by the Turkish government as a bargaining chip to leverage its interests in U.S. court cases. Tensions between the two countries also stem from American support for Kurdish fighters in Syria, and the U.S. refusal to extradite the Turkish cleric Fethullah Gulen, accused by Erdogan of instigating the 2016 coup attempt against the Turkish president.

The GSP program is the largest and oldest U.S. trade preference program, which provides developing countries with duty-free access to the U.S. for several thousand categories of products.

USTR said it will hold a public hearing and comment period for Turkey’s GSP eligibility review.

“We hope that Turkey will work with us to address the concerns that led to this new review of their duty-free access to the United States,” Deputy US Trade Representative Jeffrey Gerrish said.