ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Anwarul HodaSubscribe to Anwarul Hoda

Has India's Trade Benefited from the US' Generalised System of Preferences?

An analysis of the United States' Generalised System of Preferences scheme, introduced in 1976, reveals that although it has the potential to stimulate imports from developing countries, the structural deficiencies of the scheme have prevented it from making more than a nominal overall impact. These deficiencies include limited product coverage, competitive need limitations, discretionary decision-making on specific aspects, requirements of reciprocity and the existence of parallel unilateral preferential schemes. Additionally, the reduction in most favoured nation tariffs after successive rounds of multilateral trade negotiations has eroded the margin of preference and diminished the value of these concessions. As a consequence, preferences under the system will largely pass into an era of near irrelevance. Despite the gloomy outlook at present, it would be worthwhile to persevere with the system rather than make futile attempts to convince the United States of the need to make far-reaching improvements in its unilateral preferences.
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