Macro Economy

American small businesses rally behind India in GSP review

Amiti Sen New Delhi | Updated on July 29, 2018


Say withdrawing benefits under the system could hurt biz, jobs in the US

A number of American small businesses across sectors have urged the United States Trade Representative’s (USTR) office to continue extending tariff benefits under the Generalised System of Preferences (GSP) to India as withdrawing them could hit their own bottomlines, employment capabilities and the welfare of employees working for them.

In representations made to the USTR as part of the ongoing GSP Country Practice Reviews of India, Indonesia and Kazakhstan, the businesses have argued that for the sake of the dairy, pork and the medical equipment industry that want the benefit to be withdrawn, the US government should not ignore the interests of numerous other sectors.

“The USTR should not bow to the demands of three industries when it has the potential to harm hundreds, if not thousands of US businesses in other markets,” pointed out a representation from Connection Chemical, LP, a chemical distributor of industrial and fine ingredients in North America.

The company pointed out that the GSP programme contributed to the cost efficiency of imports from India, Indonesia, and Thailand. “These imports are made with long-standing suppliers and should the GSP status of India, Indonesia, and Thailand be revoked, it would be extremely time-consuming to identify new suppliers with the same quality and price point,” it said.

The GSP allows market access at nil or low duties for about 3,500 Indian products, including chemicals and textiles. The scheme was, however, not renewed for India by Washington in April as the US Trade Representative’s office said that it wanted to hold an eligibility review. The complainants urging the USTR to remove the benefit are mainly from the dairy industry and the medical devices manufacturers who are not happy with certain restrictions in the Indian market.

Will hurt expansion plans

“If GSP benefits for India were revoked, we would look at cutting benefits to our staff, we would delay hiring additional workers, we would cut costs across the board where possible,” pointed out a petition from Lance Kirkland, from Kirkland Associates Ltd, small business from Oregon. The company, which imports radiators from India, plans to expand and hire more people. “If GSP is not maintained it would severely hurt these plans,” it added.

Albaugh, a producer and marketer of post-patent products for agriculture, offers to US farmers unbranded alternatives at lower prices, stated a representation from the company to the USTR.

“Many of the raw materials used by Albaugh are not available from domestic producers and therefore are sourced from BDCs such as India. If GSP eligibility for India is withdrawn, this will greatly impact Albaugh’s business, which employs approximately 300 people throughout the US, and its ability to offer such opportunities for savings to the American farmer,” the representation added.

According to figures furnished by the USTR, imports from India in 2017 under the GSP scheme was about $5.6 billion, which was a fourth of total imports under GSP at $21.2 billion.

Published on July 29, 2018

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