Brussels, 05/03/2012 (Agence Europe) - The European Parliament is expected to give its backing to the update of the EU's generalised trade preferences (GSP), as proposed by the Commission last May. The idea is that high and upper-middle income countries will be removed from the scheme and more will be done to help developing countries most in need.
Fewer beneficiary countries. By adopting Christofer Fjellner's (EPP, Sweden) report, the European Parliament's international trade committee effectively backed the Commission project to update the EU's GSP so that it reflects recent shifts in world trade patterns (see EUROPE 10375). Preferences for high and medium income countries will now be taken off the World Bank's list. Hydrocarbon producer and exporter countries, such as Saudi Arabia, Kuwait, Qatar and Russia, are targeted and so are some of the major emerging economies. The list of countries currently benefiting from EU preferences will be reduced by more than half, from 176 to around 80. Imports that qualify for these preferences will be reduced from €60 billion (4% of EU imports) to €37.7 billion.
More guarantees for textiles. The international trade committee also decided to extend the range of products covered by the GSP to include certain unwrought metals (aluminium oxide, led, cadmium and others), which are of particular value to the countries (most of which are in Africa) that still benefit from the GSP. MEPs also decided to toughen up proposals to protect the European textile/clothing industry from very low price product imports. Preferences for these products may be removed in the event of increased imports over a year that are above or equal to 12.5% (as opposed to the 15% proposed by the Commission) or if imports of specific products go above 6% of total EU imports (as opposed to the 8% proposed by the European Commission).
Far Left critical. The GUE/NGL Group, which opposed the updated GSP said that “now, all countries whose per capita GDP goes above $4,000 a year, will be categorised as being too rich to benefit from the EU's generosity”. Helmut Scholz accused the Socialists of “abandoning development goals”. The German MEP also attacked the Conservatives, Socialists and Liberals of “turning a deaf ear to the arguments of the unions and development NGOs. If we consider the case of a poor country, like Ecuador, removing trade preferences would severely threaten more than 200,000 jobs” in the country, warned Scholz.
The GSP has been operating since 1971 and grants trade preferences, such as zero or reduced tariffs, for developing countries' exports to the EU, so as to help them reduce poverty and promote sustainable development and good governance. The current GSP has been in effect since 2009 and expires at the end of 2013, so the new regulation has to be in place by 1 January 2014 at latest. The Parliament will now start informal three-way talks with the Council and Commission, with a view to reaching a first-reading agreement. (EH/transl.fl)