Brussels, 13/06/2012 (Agence Europe) - The EU's new trade preference scheme for developing countries that will apply from 1 January 2014 will not include high and upper middle income countries, so that more can be done for poorer ones.
In adopting the report by Christofer Fjellner (EPP, Sweden) by 503 votes to 107, with 37 abstentions in plenary session on Wednesday 13 June, the European Parliament (EP) approved the draft regulation proposed by the Commission in spring 2011 to update the EU's generalised system of preferences (GSP) to reflect the changes that have taken place in world trade.
The new GSP will not grant tariff preferences to countries listed by the World Bank as having high or medium per capita income. Thus countries where income per inhabitant has exceeded $US 4,000 for four years will no longer be included in the scheme: this includes fuel producing and exporting countries, such as Saudi Arabia, Kuwait, Qatar and Russia, and the emerging economies. The update will reduce the number of countries that enjoy preferential access to EU markets from 176 to around 75. The EU will also reduce the total value of imports that qualify for EU preferences from €60 billion in 2009 to about €37.7 billion in 2014, thus creating room to increase preferences for the remaining beneficiaries. Some of the high and upper middle income countries ruled out of the GSP, such as Colombia and Peru, have negotiated other free-trade or preferential agreements and the remainder are expected to follow suit and conclude similar agreements.
The GSP update also provides for new eligibility rules for the “GSP+” incentive scheme. To be eligible for the GSP+, any country's exports would have to account for less than 2% of the EU's total GSP imports (up from 1% currently) and the country would have to prove that it complies with 27 international human rights and sustainable development conventions. Until they conclude bilateral agreements with the EU, Pakistan, the Philippines and Ukraine will be able to apply for zero EU duties to be charged on their exports to the EU under the scheme.
The EP also reduced the threshold at which safeguards will be triggered for textiles to ensure that the GSP+ concession does not lead to import surges that harm EU producers. MEPs negotiated a rule with the Council that tariff preferences for these products will be suspended for a given country if EU imports from that country grow by 13.5% or more in a year (down from the Commission proposal of 15%), or if imports of specific products exceed 6% of total EU imports of these products (down from the Commission proposal of 8%).
The EP also voted to extend the range of products covered by the GSP to include some raw metals (aluminium oxide, lead, cadmium and others), that are of particular value to countries (most in Africa) that will remain in the GSP scheme.
This is the first time that Parliament has exercised its power, introduced by the Lisbon Treaty, to legislate on the GSP. It negotiated a rule to ensure that the EP will have the right of veto over any changes in country coverage, product coverage, import thresholds or temporary withdrawals of GSP preferences. (EH/transl.rt)