USTR, India Discussing a Possible Return to GSP in Exchange for Lifting Some Retaliatory Tariffs
The U.S. trade representative and India's Commerce and Industry Minister Piyush Goyal have been talking on the phone, with the goal of trading a return to the Generalized System of Preferences benefits program for better agricultural access, according to two sources following the trade talks. The original industry complaints about market access filed with USTR, requesting that India be expelled from GSP privileges were from the medical device industry and from the dairy industry. A lawyer following the trade talks said that "there's talk -- and this is still a very contentious issue" -- that the pricing controls on medical devices, such as stents, would be changed in India.
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The same lawyer said the Indian government is offering to roll back tariffs on dried chickpeas, lentils, almonds and apples -- all products that face additional tariffs because of Section 232 tariffs on Indian steel and aluminum exports. American apples are currently taxed at 70 percent, compared to 50 percent for other countries' apple exports; the tariff on almonds and walnuts increased by 20 percentage points; and chickpeas and lentils have an additional 10 percentage points of duties. Most of these products are imported at low volumes, but India projected that it would collect more than $100 million in tariffs on almonds in the shell, and more than $20 million on apples.
The U.S. would not roll back the Section 232 tariffs in return for the end of retaliatory tariffs. "This is Trump, after all," the lawyer said.
Jaime Castaneda, senior vice president for trade policy at the U.S. Dairy Export Council said his team would meet with USTR officials on Sept. 10, "but I honestly don't know anything about what the agreement in principle may or may not be." He said he doesn't know if increased dairy access is part of the negotiations.
"What I can tell you is, the Indians hide behind this whole issue of religious reasons and that's 100 percent bogus." Castaneda said that more than 10 years ago, Indian officials told U.S. officials that U.S. dairy could not be imported unless the cows had never been fed blood meal. "Anybody who has been in India understands, not everybody is a vegetarian. There is a number of ways you can label things to make sure people are informed to make their own decisions," Castaneda said.
Castaneda said whey products -- both for poultry feed and for food -- would be a natural export for India, as would milk powder and lactose. He also said, "India consumes large quantities of pizza, believe it or not. Most of the chain operations that operate in the United States operate in India. They like to be supplied by the same folks that are supplying them in the United States," but that is not allowed in India.
If dairy is not included in a deal, the dairy industry would continue to oppose the granting of GSP, Castaneda said. The spokesman for the Indian Embassy in Washington did not respond to a request for comment by press time. The Office of the U.S. Trade Representative declined to comment.