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U.s. Terminates Turkey Preferential Trade Agreement

Trump`s move had shaken the Turkish pound. Since then, relations between the two countries have been strained over differences ranging from Ankara`s plan to buy a Russian missile system to divergent interests in Syria. Next Wednesday, India will lose its trade privileges with the United States as beneficiaries of the Generalized Preference System (GSP), U.S. President Donald Trump announced Friday. Without prejudice to WTO rules, the Turkey-EU customs union is the most important legal basis for Turkish free trade agreements. Within the framework of the customs union, Turkey is adapting its trade policy to the EU`s common trade policy. This rapprochement concerns both autonomous regimes and preferential agreements with third countries. Turkey negotiates and concludes free trade agreements with third countries in parallel with the EU. Under the EU common tariff, preferential trade regimes are the most important part of trade policy towards third countries.

U.S. President Donald Trump noted that Turkey received preferential treatment in 1975 under the Generalized Preference System (GSP), which allows goods to enter the United States duty-free, and said in the proclamation: “I have found that, on the basis of its level of economic development, it is appropriate to end Turkey`s designation as a beneficiary developing country effective 17 May 2019.” However, U.S. trade agents accuse New Delhi of “putting in place a wide range of trade barriers that have serious negative impacts on U.S. trade.” U.S. officials said their country`s trade deficit with India reached $27.3 billion in 2017. The end of the GSP by India follows the lack of assurance in the United States that it will provide fair and equitable access to their markets in many sectors. Turkey`s decision of the GSP follows the finding that it is sufficiently economically developed and should no longer have preferential access to the US market. WASHINGTON – On the orders of President Donald Trump, the United States wants to abolish the preferential trade status of India and Turkey, as the authorities announced Monday. Washington accuses New Delhi of creating a wide range of trade barriers that have a negative impact on U.S. trade. According to media reports, India could impose higher tariffs on imports of U.S. products in response to Trump`s recent step.

Turkey, as a contracting party to the WTO General Agreement on Tariffs and Trade (GATT), implements free trade agreements in accordance with Article XXIV of the 1947 GATT. This article allows Turkey to give its trading partners favourable treatment within the framework of a customs union or free trade area, without extending this treatment to all WTO members, subject to certain conditions. Read also: Trump`s trade movement could deal a political blow to Modi India, but “has implemented a wide range of trade barriers that have serious negative impacts on U.S. trade,” he said. In February, India began applying new rules on e-commerce to protect domestic traders from foreign economic giants. The rules caused serious disruption for Amazon and Flipkart, mostly owned by US retail giant Walmart. But Ankara had hoped that Washington would not advance the decision and said it would oppose the $75 billion target for mutual trade between President Donald Trump and Turkish President Tayyip Erdogan. The Turkey-EU customs union has eliminated tariffs, quantitative restrictions and measures of equivalent effect in trade in industrial products to ensure the free movement of goods.