20 May 2019
U.S. Terminates Duty-Free Benefits for Turkey
President Trump issued a proclamation on 16 May rescinding Turkey’s designation as a beneficiary country under the Generalised System of Preferences, effective 17 May. As a result of this action, thousands of products from Turkey are no longer eligible for duty-free treatment in the United States, potentially enhancing the competitiveness of other suppliers in products where Turkey is an important U.S. supplier such as certain gold necklaces and neck chains, certain automotive parts, marble, polyethylene terephthalate, certain sugar confectionery products, and certain sporting, hunting and target-shooting shotguns.
On 4 March, President Trump provided a 60-day notice to Congress of his intent to remove both Turkey and India from the GSP programme. India had asked that any GSP removal be delayed until the completion of its national elections, which will be wrapped up on 19 May. Both Turkey and India had been the subject of country practice reviews relating to their market access policies, but while the March notification said that India’s removal from GSP would be based on a lack of equitable market access for U.S. exports it also claimed that Turkey no longer needed GSP due to its level of development. This “competitiveness” criterion differs from “graduation” from GSP, which is based on per capita GDP and would have provided more time before removal.
Turkey was the fifth largest GSP beneficiary in 2018 with total imports of US$1.9 billion. The country exported a wide variety of products to the United States under this programme, including jewellery and stone articles, food and agricultural products, and a broad range of manufactured goods including auto parts, metals and plastic products. The same proclamation allows the safeguard actions on photovoltaic cells and large residential washers to apply to Turkish exports, while a separate proclamation issued on the same day lowered the additional tariffs on imports of steel from Turkey from the exceptional level of 50 percent to the 25 percent level applicable to other countries’ exports.