President Trump today called for the termination preferential trade treatment for Turkey, a policy priority long advanced by the Hellenic American Leadership Council (HALC) and Armenian National Committee of America (ANCA).
“HALC and ANCA are gratified to see the Administration act on our long-standing call to protect American taxpayers and consumers from having to forcibly subsidize Turkish exports to U.S. markets,” HALC Executive Director Endy Zemenides and ANCA Executive Director Aram Hamparian. “While – for reasons that remain unclear – the President’s determination is couched in patently contradictory praise for Turkey’s progress, the net effect of this action is obvious to all: A major setback for Ankara, a much-needed leg up for American manufacturers, and a big step toward a more sensible and serious approach to Erdogan’s increasingly anti-American regime.”
In letters sent to Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Nancy Pelosi (D-CA) earlier today, President Trump argued that Turkey’s termination from the Generalized System of Preferences (GSP) program follows a finding that it is sufficiently economically developed and should no longer benefit from preferential market access to the United States market. “Increases in Gross National Income per capita, declining poverty rates, and export diversification by trading partner and by sector are all evidence of Turkey’s increased level of economic development,” stated the letters.
However, the U.S. Trade Representative (USTR) announced in August, 2018, that it was reviewing Turkey’s eligibility in the GSP program after Ankara imposed retaliatory tariffs on U.S. goods in response to American steel and aluminum tariffs.
The U.S. designated Turkey as a GSP beneficiary country in 1975. According to the USTR website, 17.7% of all U.S. imports from Turkey, totaling $1.66 Billion, benefitted from the GSP program. Among the leading GSP import categories were jewelry and precious metals, vehicles and vehicle parts, and stone articles.
By statute, Turkey’s removal from GSP will not take effect until at least 60 days after the notifications to Congress and the government of Turkey, and will be enacted by a Presidential Proclamation.
Under GSP, certain products can enter the U.S. duty-free if beneficiary countries meet the eligibility criteria established by Congress. These criteria include, among others, respecting arbitral awards in favor of United States citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, and providing the United States with equitable and reasonable market access. Countries can also be graduated from the GSP program depending on factors related to economic development
