US ends Turkey’s preferential trade agreement for ineligibility

CAIRO – 17 May 2019: The United States has terminated Turkey’s preferential trade treatment that allowed some exports to enter the country duty-free, but it has halved its tariffs on imports of Turkish steel to 25 percent.

Ankara earlier said the move to terminate the treatment is against the $75 billion target for mutual trade laid out by President Donald Trump and Turkish President Tayyip Erdogan.

Washington said it was appropriate to terminate Turkey’s eligibility to participate in the Generalized System of Preferences (GSP) program, based on its level of economic development.

The US Trade Representative (USTR) in early March said Turkey was no longer eligible to participate.

It had begun reviewing the NATO ally’s status in the program last August when the two countries were embroiled in a diplomatic row.

The White House said on Thursday that it was reducing the 50 percent tariff, doubled last August, to 25 percent.

During a spat in 2018, Trump had imposed higher tariffs on imports of Turkish steel and aluminum to put economic pressure on NATO member Turkey to force it to release Andrew Brunson, an American pastor who was detained there over terrorism charges.

Trump’s move last year had then caused the Turkish lira to lose value against the US dollar. Since then, the ties between the two countries have remained tense over disagreements ranging from Ankara’s planned purchase of a Russian S-400 missile defense system to diverging interests in Syria.

During that time, the US and Turkey imposed reciprocal tariffs on a number of goods, including Turkish steel and aluminum.