India, US ‘thinking big’, says Goyal, rules out mini trade deal or FTA

Subject : Economy

Section: External Sector

Concept:

Union Commerce and Industry Minister Piyush Goyal ruled out a mini-trade deal or FTA with the United States and said that they discussed the delay in business visa issuance at the conclusion of the India-US Trade Policy Forum meeting.
He also noted that revoking of the Generalized System of Preferences (GSP) is not a priority for the Indian government.
The previous Trump administration has revoked the Generalized System of Preferences (GSP) from India.
Minister said that the trade between the two countries continues to expand very rapidly and the GSP withdrawal has not been to the detriment of our growing trade ties.

Generalized System of Preferences(GSP)

GSP is the largest and oldest US trade preference programme, designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries.
It is an umbrella that comprises the bulk of preferential schemes granted by industrialized nations to developing countries.
It involves reduced Most Favored Nations (MFN) Tariffs or duty-free entry of eligible products exported by beneficiary countries to the markets of donor countries.
The idea of granting developing countries preferential tariff rates in the markets of industrialized countries was originally presented at the first United Nation Conference on Trade and Development (UNCTAD) conference in 1964.
The GSP was adopted at UNCTAD in New Delhi in 1968 and was instituted in 1971.

UNCTAD

United Nation Conference on Trade and Development (UNCTAD) is a permanent intergovernmental body established by the United Nations General Assembly in 1964.
It supports developing countries to access the benefits of a globalised economy more fairly and effectively.
It has 195 member nations.

Most Favored Nations (MFN)

As per the World Trade Organisation’s( WTO) General Agreement on Tariffs and Trade’s MFN principle, each of the WTO member countries should “treat all the other members equally as ‘most-favoured’ trading partners.”
According to the WTO, though the term ‘MFN’ “suggests special treatment, it actually means nondiscrimination.”