The US just recently removed several countries, three from Asia, from its developing nations list that acquires trade benefits. Accordingly, they are India, Indonesia, Hong Kong, Brazil, South Africa, and Argentina.
Previously, by being in the developing nation list, these countries received special benefits during trades with the US. After reviewing upon these countries’ trade profile, the US decided to reassess their eligibility to enter the list.
If, by any chance, the investigation proved that some among the countries actually were not acceptable to be in the list under the US Federal laws, they will utterly eradicate their trade benefits.
The United States Trade Representative (USTR) removed those countries under the methodology for countervailing duty (CVD) investigations. Accordingly, the institution currently follows a novel method as the existing one is already obsolete.
“For purposes of US CVD law, the USTR therefore considers countries with a share of 0.5% or more of world trade to be developed countries,” the USTR said in a federal notice.
Starting from July last year, the Trump administration has been working to revise the trade laws. Among the revision, the administration will try to prevent ‘self-proclaimed developing countries’ from getting benefits and flexibility.
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From Asia, How They Responded to US Trade Maneuvers
In response to the US’ decision, the three Asian countries have various response regarding it. However, among their reactions, they are all afraid that there might be additional expenses for exports and imports which will greatly affect their respective countries’ economy.
A New Delhi-based trade expert said that this move will eradicate India’s hopes to restore GSP benefits. In addition, the benefits are the current joint project between India and the US which discussion will be held this week.
“According to this notice, India is no longer a developing country and its hopes of getting GSP may not materialize as it does not qualify to get the benefits.”
Meanwhile, Indonesia’s Coordinating Ministry for Economic Affairs, Airlangga Hartanto, expresses that the country is not afraid of any investigation. However, he expected that the benefits for Indonesia will significantly decrease.
“We don’t worry about that. The eradication doesn’t automatically raise trade taxes. But the impact is there most likely be reduction of facilities for developing countries,” said Airlangga.
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