Minister reacts to US decision to end preferential tariff system for Turkey

ANKARA

Turkish Trade Minister Ruhsar Pekcan has criticized the U.S. intention to end preferential tariff system for Turkey, still pledging to spend efforts to reach a mutual trade goal despite the new obstacle.

“Unfortunately, this decision conflicts with our mutual objective of reaching a bilateral trade volume of $75 billion, that had been announced by both governments,” Pekcan said in a Twitter post on March 5, Ruhsar Pekcan said the value of the U.S. imports amounted to $20.9 billion under its Generalized System of Preferences (GSP) scheme in the first 11 months of 2018.         

Pekcan noted that Turkey was the fifth largest supplier to the U.S. with a share of 8.2 percent in that period, with exports amounting to $1.74 billion.         

“Following the monitoring process going on since last August, the U.S. government officially declared that it will terminate GSP designations for Turkey and India,” she said.         

On March 4, the U.S. announced its intention to terminate preferential tariff systems for Turkey and India which are aimed at bolstering the trading prospects of developing nations.

The minister noted that the decision would also negatively affect small and medium-sized enterprises and manufacturers in the U.S. “We still would like to pursue our target of increasing our bilateral trade with the U.S. that we see as our strategic partner, without losing any momentum,” she added.

Turkey was designated as a program beneficiary in 1975, and the trade representative’s office pointed to a number of advancing economic metrics in establishing its determination.         

India was the largest beneficiary of the system, with it covering roughly $5.69 billion in imports, according to a report issued by the Congressional Research Service in January.

The U.S. Trade Representative’s Office said India and Turkey”no longer comply with the statutory eligibility criteria.”

The program allows certain products from developing countries to enter the U.S. duty-free

The office said the decision came at U.S. President Donald Trump’s direction.

India’s commerce ministry said on March 5 that it won’t try to hold onto its preferential zero-tariffs status.

The decision reflects a failure for the two sides to come to agreement on various trade issues, but is not one India will try to fight, said Monideepa M. Mukherjee, a spokeswoman for India’s commerce ministry.

“The GSP benefits will go, the U.S. will not relent on this,” she said.

Mukherjee said India disagrees over the market access issue, but has outgrown GSP. The savings on tariffs amounted to only $190 million a year, the ministry said.

“It’s meant for least-developed countries, and India has graduated out of that,” Mukherjee said.