ACP exporters and EU importers discuss EU Generalised System of Preferences (GSP)

The Public Consultation on the EU's Generalised System of Preferences (GSP), that started in April 2010, is still open until Next Monday 31st of May 2010 and contributions can be submitted until the end of Monday.

(Joyce van Genderen-Naar)

The EU's Generalised System of Preferences (GSP) is a trade arrangement through which the EU provides preferential access to the EU market to 176 developing countries and territories, in the form of reduced tariffs for their goods when entering the EU market. The GSP scheme is an important element in the EU's active support for the sustainable development of developing countries.

The present GSP Regulation expires on 31 December 2011. The purpose of the present consultation exercise is to seek comments from interested parties as inputs to the Commission's work to prepare a future proposal to the Council and Parliament on a successor Regulation. The consultation is aimed at all parties with an interest in the EU GSP scheme, including stakeholders within the EU and in third countries, including beneficiaries.

The report on the Consultation which will be published by the Commission on the Trade website.

View the consultation document

The Commission also organizes specific meetings with interested parties, such as the DG Trade Civil Society Meeting organised on 26 May 2010 in Brussels to discuss the Public consultation on the next GSP regulation with the participants. EU importers need a simple, stable and predictable GSP regulation, was the message of EuroCommerce (the EU retail, wholesail and international trade representation to the EU). In its position paper EuroCommerce says that the companies attracted by the GSP are importers and retailers in the EU, who operate in a highly competitive business environment and will base their planning on the GSP only if the system meets their specific expectations, i.e. simple rules, one year predictability, legal certainty, significant product coverage, a GSP Plus that acts as a true incentive, proper & early stakeholder consultation, preferential rules of origin that work in practice. See: Click Here

ACP exporters who export their products to the EU market under the GSP and EBA stress that the complexity of the Rules of origin, non trade barriers, non tariff barriers and high EU standards make it difficult to enter the EU Market and are the main problem that preferential trade arrangements did not work and will not work. The Rules of Origin should be made more user friendly and adapt to the needs of the ACP countries.

However the Rules of origin are not addressed by the GSP Public Consultation, because there was already a Public Consultation on the Rules of Origin in 2006 and the reform is on its way according to the EC DG Trade.

What ACP (Africa, Carribean, Pacific) countries really need is the processing and distribution of their commodities and raw materials, product diversification, marketing, efficient distribution networks, transport and infrastructure.

Another concern is the artificial line between LDCs and non-LDCs. The suggestion is to add some of the LDCs to the EBA list and to apply it to custom unions in Africa. There should be one scheme (not GSP, GSP+ and EBA) with graduations according to the economic situation of the countries or objective development criteria such as the GDP per capita should be applied. In case of import share as criterion it should be a high percentage for all products.

CARIS (Centre for the Analysis of Regional Integration, University of Sussex) presented its Mid Term Evaluation of the EU's GSP, a report commissioned and financed by the European Commission. In the executive Summary CARIS says in point 15. that 'there is little evidence that the EU's preference regimes have led to a diversification of exports into new products'. Furthermore in point 26. 'While there are some significant trade and output effects for a sub-set of agricultural commodities and regions (notably fruits and vegetables in Ecuador, Costa Rica and Argentina, sugar products in the Caribbean, North Africa and Sub-Sahara African EBA beneficiaries, oils and fats in North Africa), the substantial expansionary impacts of the EU GSP occur in the textile, apparel and leather goods industries within Southern and Eastern Europe, North Africa, Cambodia and Pakistan.'

' Among the EBA regions in the model, Cambodia and Bangladesh benefit most from the EU scheme, while the EBA Sub-Saharan Africa composite region gains very little overall. ' (point 25).

'The bilateral gravity modeling exercise identified some evidence that preferences arising from the EU's free trade arrangements as well as those applied to the Cotonou countries had a positive impact on trade with the EU, rather than EBA, GSP, or GSP+ arrangements, ' according to CARIS in point 23 of the Executive Summary.

Joyce van Genderen-Naar

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