Strasbourg, 09/05/2011 (Agence Europe) - The European executive is planning to cut by half, from 2014, the list of 176 nations which currently benefit from the regime of commercial preferences granted by the EU to developing countries under its system of generalised preferences (SGP).
On 10 May, by initiative of its Trade Commissioner Karel De Gucht, the European Commission will propose halving, from 2014, the number of developing countries which benefit from the SGP, a regime of preferential customs tariffs - reduced tariffs or no tariffs for their export products (more than 6,200, mainly agro-food products) to the EU. The European executive is planning to reduce from 176 countries at the moment, under the 2009-2011 programme, to just under 90 countries, the list of beneficiary nations from the system of preferences set in place in 1971. Under the new calculation key under consideration in Brussels, countries which no longer come under the category of developing countries as laid down by the World Bank, but which are now classed as Middle Income Countries (MICs), such as China, India, Indonesia, Morocco, Nigeria, Pakistan and Ukraine, would no longer be eligible for the SGP. The preferential regime granted for the purposes of the fight against poverty “seems increasingly hard to justify” when it comes to these countries, the Commission states in its draft text. Also to be removed from the list are countries which have signed a bilateral free-trade agreement with the EU.
Given the impact of this move on the countries in question, the Commission's draft has given rise to a great deal of controversy. India, in particular, for example, has a lot to lose from such a measure, as half of its exports to the EU currently benefit from these preferential tariffs. According to Community sources, Commissioner De Gucht's proposal has also come up against the misgivings of some of his colleagues within the college, and from some of the member states. Some of these argue that there is a risk that the measure would hit the most vulnerable countries particularly hard, because the Middle Income classification established by the World Bank covers a very broad range of countries. This means that Botswana, Cape Verde and Mauritius could be particularly affected by the move. A compromise giving them a period of time to adapt is believed to be under discussion. Additionally, certain member states also intend to keep preferences in place for friendly countries or former colonies in Africa and Latin America.
The SGP takes the form of triannual programmes. The current programme will end on 31 December of this year, but in mid-April, the member states agreed to extend it by two years, in order to reform it. This means that the next programme will apply as of 1 January 2014. It is worth noting that the SGP, the objective of which is to reduce poverty and promote sustainable development and good governance, also gives additional advantages under the SGP+, to countries which undertake to observe international employment law and human rights conventions. Additionally, the 49 least-developed countries (LDCs) enjoy quota-free and duty-free access to the EU market under the “Everything but Arms” programme.
By virtue of the Lisbon Treaty, the draft regulation on the new SGP is a matter for co-decision between the Council and the Parliament. The European trade ministers will hold an initial exchange of views on the proposal at a meeting called by the Hungarian Presidency for 13 May. (E.H./transl.fl)