The European Union’s Generalised Scheme of Preferences (GSP), which abolishes tariffs on imports from 71 developing countries, has achieved new records. These preferences have been used to the tune of €69 billion in exports in 2018, according to the joint biennial report by the European Commission and the EU’s External Action Service (EEAS), published on Monday 10 February.
“Through the EU’s GSP, we are supporting developing countries to grow and advance in a sustainable way, not least when it comes to climate action. Our preferential trade tariffs help to take thousands out of poverty, to reduce inequalities and to bring economic growth”, said High Representative for Foreign Affairs Josep Borrell.
While the number of beneficiaries has decreased since the previous report (see EUROPE 11943/15), the impact of preferences is more marked, both in absolute and relative numbers, the document states. The value of these countries’ imports to the EU increased by 16.2% to €183.6 billion in 2018, of which €68.9 billion - almost 40% - was imported via the GSP.
The share of the 48 Least Developed Countries (LDCs) has also increased by 15.3% to reach 2.2% of European imports in 2018 - twice their share of world imports, which the EU also welcomes.
However, the clothing sector is the main beneficiary, with export diversification remaining “a challenge”, the report says.
Because of their income, some beneficiary countries have lost (Armenia in 2018, Sri Lanka in 2019) or will lose (Nauru, Samoa and Tonga in 2021) their GSP beneficiary status, while others will emerge from the ‘Everything but Arms’ system for LDCs, such as Bhutan (2023), Sao Tome and Principe and Solomon Islands (2024) and probably also Tuvalu and Kiribati, Bangladesh, Laos, Myanmar, Nepal and Timor-Leste.
Sustainability, a still mixed record
The use of preferences requires compliance with the United Nations sustainable development principles. While the report notes positive human rights developments in many recipient states, there are still warning signs: restrictions on space for civil society, particularly in Pakistan and the Philippines, reinforced calls for the application of the death penalty in Sri Lanka, Mongolia and the Philippines, violations of freedom of association, etc.
The EU has intensified the dialogue with Bangladesh, Cambodia and Myanmar in order to obtain concrete actions to address the gaps in respect for fundamental human and labour rights.
Following a fruitless commitment procedure with Cambodia on human and labour rights, the procedure for the temporary withdrawal of tariff preferences should be completed this week (see EUROPE 12421/11).
The current GSP regulation will expire on 31 December 2023, and preparations for the new Regulation are reportedly already under way.
To read the report: https://bit.ly/2uyN7X2 (Original version in French by Hermine Donceel)