Brussels, 10/01/2014 (Agence Europe) - Since 1 January 2014, only 90 developing countries - compared with 177 previously - now benefit from the EU's generalised system of preferences (GSP).
The new rules that govern EU trade preferences to encourage developing countries to be better integrated in international trade have been in application since 1 January 2014 and will continue for a period of ten years. The EU's GSP was set up in 1971 but has since been revised several times. The reform of the EU's GSP, undertaken in 2011, is the result of the EU's resolve to focus on “objective criteria” for development in order to grant preferences granted unilaterally by the EU.
The objective of the reform was to focus on the countries which are most in need, based on the observation that over recent years the emerging economies have harnessed the benefits of the earlier GSP scheme to their advantage - and to the detriment of the most vulnerable countries. The GSP has therefore seen criticism of it become harsher - in order to benefit from the GSP, a country must not be ranked by the World Bank as a high or middle income country for three years prior to its inclusion on the list, nor must it benefit from a trade agreement with the EU. Additionally, high income countries - but whose economy is not very diversified - no longer benefit from the GSP.
The list has therefore been trimmed down to 90 countries compared with 177 in the previous scheme. In total, 41 countries benefit from the GSP as countries with low and lower-middle income - Armenia, Azerbaijan, Bolivia, China, Cape Verde, Colombia, Cook Islands, Costa Rica, Ecuador, Georgia, Guatemala, Honduras, India, Indonesia, Iraq, Islamic Republic of Iran, Kyrgyzstan, Maldives, Marshall (islands), Micronesia, Mongolia, Nauru, Nicaragua, Nigeria, Niue, Pakistan, Panama, Paraguay, Peru, the Philippines, El Salvador, Sri Lanka, Syria, Tajikistan, Thailand, Congo, Tonga, Turkmenistan, Ukraine, Uzbekistan and Vietnam. Among these, 10 countries benefit from the SGP+ as vulnerable countries, but they have to have ratified a core of 25 international conventions on human rights and labour rights, environmental standards, and to respect the principle of good governance - Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, Georgia, Mongolia, Paraguay and Peru continue to benefit from the GSP+, and Pakistan is benefiting from the scheme for the first time.
The other 49 countries benefit from the GSP as less developed countries (LDCs) under the Everything But Arms initiative, which offers their products duty- and quota-free access to the European market - Angola, Burkina Faso, Burundi, Benin, Chad, Democratic Republic of Congo, Central African Republic, Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau, Comoros Islands, Liberia, Lesotho, Madagascar, Mali, Mauritania, Malawi, Mozambique, Niger, Rwanda, Sao Tome and Principe, Sudan, South Sudan, Sierra Leone, Senegal, Somalia, Togo, Tanzania, Uganda, Zambia, Afghanistan, Bangladesh, Bhutan, Cambodia, Laos, Myanmar/Burma, Nepal, Timor-Leste, Yemen, Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu and Haiti.
Excluded from the new scheme are 20 high income countries (Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates, Oman, Brunei Darussalam, Macao) and upper-middle income countries (Argentina, Brazil, Cuba, Uruguay, Venezuela, Belarus, Russia, Kazakhstan, Gabon, Libya, Malaysia and Palau). These countries now apply the ordinary scheme (most favoured nation clause, MFN). China and Thailand will be included in this in 2015 according to how their GDP progresses.
Also excluded are 33 overseas countries and territories, which have their own rules on EU market access. Similarly another 34 countries enjoy another trade scheme with the EU which ensures an almost equivalent coverage to that of the GSP - countries which have concluded a free-trade agreement or under subject to special autonomous trade schemes, such as the regulation on the application of schemes planned for countries having an economic and partnership agreement (EPA) or the special scheme for the Western Balkan countries. This class includes countries from the Euromed area, Cariforum countries, countries from Eastern and Southern Africa, and countries linked by the regulation on market access under the EPA (Botswana, Cameroon, Côte d'Ivoire, Fiji, Ghana, Kenya, Namibia and Swaziland) plus South Africa, Mexico and Papua New Guinea.
There has been limited extension of the coverage of products - which was very high in the previous scheme (66% of tariff lines, 91% if the 25% of other lines are added that already had a zero duty rate) - and of preferential margins. Only 23 new tariff lines - mostly concerning raw materials - are covered by the new scheme. (EH/transl.fl)