WASHINGTON: As many as 34 Congressmen have written to US Trade Representative Robert Lighthizer to seek reduction in tariff by India on pecan, amidst negotiations on a trade deal between the two countries.
Union Finance Minister Nirmala Sitharaman last week said that negotiations between India and the US on a trade deal are going on in "full speed", expressing hope that they will conclude soon.
Trade tensions between India and the US have been rising with US President Donald Trump complaining that tariffs imposed by New Delhi on American products were "no longer acceptable". The Trump administration had terminated India's designation as a beneficiary developing nation under the Generalized System of Preferences (GSP) in June.
The growing middle class in India has demonstrated its desire for consumer-oriented agricultural products, like tree nuts and the Indian market represents one of the most dynamic and fastest growing in the world, the lawmakers, led by Congressman Austin Scott, said in the letter dated October 24. "Unfortunately, the current high tariff (36 percent) that India charges on pecan imports makes it difficult for American producers to compete in this important market," the letter said.
"As you continue discussion with (Indian) Prime Minister Modi's administration to reach a trade deal and potentially reinstate India's Generalized System of Preference Status, we would like to stress the importance of removing existing barriers to the export of US agricultural products, specifically pecans," the Congressmen said.
They said that lowering the tariff on pecans would provide the Indians with more economical access to tree nut varieties, while providing a much-needed economic boost to rural America. The lawmakers noted that American pecan producers have faced many challenges due to rising imports from Mexico, Chinese tariffs and Hurricane Michael's impact on tree loss and 2018 crop production.
They said that gaining access to new markets for pecans will help ease the pain while orchards are replanted and a trade deal is negotiated with China. Comparing the tariffs with other varieties of nuts, they said that the current Indian tariffs on US pistachios and almonds is much lower (10 percent), which highlights how disproportionately high the pecan tariff is.
The pecan industry contributes over USD 3.57 billion to the economies of the 15 pecan producing states in the United States. Over the last ten years, exports alone have pumped an additional USD 1.25 billion in economic activity into rural America.
Reducing trade barriers into India is an opportunity to strengthen the economy of rural America. Senator David Perdue has lead a similar bipartisan letter in the Senate last month with US Senators John Boozman, John Cornyn, Tom Cotton, Ted Cruz, Martin Heinrich, Cindy Hyde-Smith, James Inhofe, Johnny Isakson, Doug Jones, Tom Udall and Roger Wicker.