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Two top American Senators have urged the Trump administration to delay until the end of the general elections its decision to terminate India's designation as a beneficiary developing country under the Generalized System of Preference (GSP) due to a lack of compliance.
In a letter to US Trade Representative (USTR) Robert Lighthizer, Senators John Cornyn from the Republican party and Mark Warner from the Democratic party argued that India-US relationship was too important to rush such an important decision in the middle of an election cycle.
"As you know, India's elections will conclude on May 23, 2019. We believe that the election season may serve as a hindrance for our Indian counterparts in negotiating and concluding a deal on difficult political issues," (sic) the two Senators wrote in the letter to Lighthizer on Friday.
The USTR's announcement specifically cited "concerns related to its compliance with GSP market access criterion," based on petitions filed from the US medical device and dairy industries.
"If another round of negotiations during the election season does not resolve the outstanding issues, we would ask you to consider delaying the issuance of a Presidential proclamation to withdraw India's GSP benefits by at least 30 days, beyond the 60-day calendar, in order to move the negotiations beyond India's elections," the Senators said.
Allowing for continued negotiations beyond the elections would underscore the importance of this bilateral relationship and provide a real opportunity to resolve these market access issues, potentially improving the overall US-India relationship for years to come, said Cornyn and Warner, who are co-chairs of the powerful Senate India Caucus.
"We understand that the Trump administration may issue a proclamation withdrawing India's GSP benefits 60 days or later from the congressional notification date," the two Senators wrote.
"Congressional support for the GSP programme was made clear last year when the US Senate and US House of Representatives reauthorised the programme, in nearly unanimous fashion, for three years," they said.
"As Co-Chairs of the United States Senate's India Caucus, we fully appreciate and support your efforts to address a host of market access issues facing American businesses in India.
On March 4, 2019, Congress was notified of USTR's intention to terminate India's designation as a beneficiary developing country under GSP due to a lack of compliance.
"While we agree that there are a number of market access issues that can and should be addressed, we do remain concerned that the withdrawal of duty concessions will make Indian exports of eligible products to the United States costlier, as the importer of those products will have to pay a 'Most Favoured Nation' (MFN) duty which is higher than the rate under GSP," the Senators said.
Some of these costs will likely be passed on to American consumers, they told Lighthizer.
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