Turkish Trade Minister Ruhsar Pekcan says end of the United States' preferential trade deal contradicts $75bn target

The file photo shows Turkish Trade Minister Ruhsar Pekcan.
Turkish Trade Minister Ruhsar Pekcan says the United States' move to terminate its preferential trade agreement with Turkey will be against the $75-billion target for mutual trade laid out by the two countries.

In a post on her Twitter account on Friday, the minister, however, welcomed Washington’s decision to halve its tariffs on the imports of Turkish steel.

The White House announced on Thursday that it was terminating the preferential trade treatment that allowed some exports to enter the country duty-free, but it has decreased its tariffs on imports of Turkish steel to 25 percent.

The White House 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 decision is effective on May 17, it added.

“Lowering the tariffs to 25% from 50% is positive, but we expect the lifting of all obstacles to bilateral trade,” Pekcan said, warning that they affected US companies, too.

"Moreover, the removal of Turkey from the GSP does not comply with our endeavors to achieve 75 billion US dollar bilateral trade volume," she added.

The Turkish minister added that work would continue to increase the trade volume between Ankara and Washington.

Established in 1974 and having covered 120 countries, including Turkey, the GSP is the largest and oldest US trade preference program. It allows “certain products” to enter the US free of tariffs, given that the countries exporting them meet the criteria such as “providing the US with equitable and reasonable market access.”

According to the US Trade Representative website, the United States imported $1.66 billion worth of goods in 2017 from Turkey under the GSP, or 17.7 percent of total imports from Turkey. It said imports include vehicles, vehicle parts, jewelry and precious metals.

US President Donald Trump in March decided to scrap preferential treatment programs for India and Turkey.
The US “intends to terminate India’s and Turkey’s designations as beneficiary developing countries under the Generalized System of Preferences (GSP) program because they no longer comply with the statutory eligibility criteria,” the US Trade Representative’s Office (USTR) said in statement.

The statement claimed that Turkey had “graduated” from the GSP program, describing that Ankara had become “sufficiently economically developed” and that it no longer qualified for the treatment.

Back in August, the USTR said that it was reviewing the NATO ally’s status in the program due to the country's imposed retaliatory tariffs on US goods in response to American steel and aluminum tariffs.In August 2018, the US president said Washington would double steel and aluminum tariffs on Turkey, arguing that relations between Washington and Ankara were “not good.”"I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!" Trump said on Twitter.

Later in August the same year, the World Trade Organization (WTO) said in a statement posted on its official website that Turkey has initiated a dispute complaint with the Swiss-based intergovernmental trade court against additional metal tariffs imposed by the United States on the Anatolian country over the detention of an American pastor.

“Turkey has requested WTO dispute consultations with the United States concerning additional import duties imposed by the United States on steel and aluminum products. The request was circulated to WTO members on 20 August,” the WTO said.

Turkey’s currency, the lira, has been losing its value as 15 percent further this year, partly from concerns about a re-run of mayoral election in Turkey’s second-largest city of Istanbul and the risk of US sanctions.

It fell again on Friday after the recent US moves. The currency stood at 6.0600 against the dollar at 1000 GMT, easing from a close of 6.0475 on Thursday.Ties between the two countries remain tense over disagreements ranging from Washington’s support for Kurdish militants, which Ankara calls terrorists, and Turkey’s subsequent imprisonment of an American pastor.

The two sides are separately at odds over Washington’s refusal to extradite Fetullah Gulen, a Pennsylvania-based cleric accused of masterminding an abortive 2016 coup against the Turkish government.

The situation was not defused despite Turkey’s release of the pastor, whom it had detained over alleged links to anti-Ankara outfits.