The EU’s current Generalised Scheme of Preferences (GSP) expires at the end of 2023. This is why the Commission proposed a new system for the next 10 years, on Wednesday 22 September. The GSP, with its three separate arrangements, is a facility granted to developing countries to help them export to the EU. It currently covers 67 countries.
For the revised system, the Commission maintains the three current arrangements and their specificities in broad terms, while adding conditions in terms of respect for human rights and climate commitment. “We have done some fine-tuning, to respond better to the changing needs and challenges of beneficiary countries – and to bring the scheme closer in line with our trade sustainability principles”, said European Commissioner for Trade Valdis Dombrovskis.
The current system is divided as follows: - the ‘Everything But Arms’ (EBA) programme removes all tariffs, except those on arms and ammunition, for all least developed countries; - the standard GSP reduces part of the tariffs on exports from lower middle-income countries, provided they respect the principles of 27 international conventions on human and labour rights; - GSP+ completely removes tariffs for 66% of the products exported from the same countries, but it is conditional not only on compliance, but also on the ratification of the 27 international conventions mentioned.
Sustainable development
In addition to the 27 international conventions currently to be respected by the beneficiaries, the Commission is adding six more. These concern: - the Paris Agreement; - the rights of persons with disabilities; - children’s rights; - labour inspection; - the right to tripartite consultations in the workplace; - international organised crime.
GSP+ beneficiaries will have a transitional period of 2 years to ratify these additional agreements, starting from the Regulation’s entry into force. In addition, these countries, which until now have had to apply for GSP+ (unlike the other two programmes where implementation is automatic), will also have to provide a detailed action plan demonstrating how they intend to implement their commitments.
Countries that do not respect the principles of these conventions (or have not ratified them in the case of GSP+ beneficiaries) may have their preferences withdrawn.
Also, in the case of serious violations of international standards, the Commission introduces an urgency procedure for a rapid withdrawal of preferences.
Another tool that the Commission believes will help to raise the ambitions of beneficiaries is the systematic involvement of civil society and stakeholders in the implementation and monitoring of commitments. The one-stop shop for complaints to the Commission (see EUROPE 12602/24) can be used in this context, according to the Commission.
Finally, in the case of a temporary withdrawal of preferences, the Commission will first analyse the socio-economic impact in the country.
Protection of the European market
The two types of safeguard measures existing in the current system, i.e. general safeguard measures for all products and automatic safeguard measures for certain product groups, are maintained in the future GSP.
However, the method of calculation for the second type is changed so that it no longer takes into account the volume of exports, but their value.
In 2019, the Commission had imposed, for example, a safeguard measure on rice from Cambodia and Myanmar (both of which benefit from the EBA) by temporarily subjecting it to tariffs.
Facilitation for the poorest countries
Several amendments to the GSP aim to broaden the range of beneficiaries. For example, imports of a product must not exceed 47% on average over 3 years (37% for the textile sector) of total imports of the same product from GSP beneficiary countries in order to continue to benefit from tariff preferences. This ceiling has been reduced by 10 points compared to the current system.
According to the Commission, this will allow for the exclusion of competitive industrialised producers and concentrate preferences on less competitive products.
In addition, the Commission proposes to remove the ‘import share’ criterion for access to preferences. The GSP requires, until now, that the share of EU imports from any one country does not exceed 7.4% of total imports from GSP beneficiary countries.
“By updating its focus, we will help to advance sustainable development across the world, boost global trade and help those most in need”, said Valdis Dombrovskis.
See the proposal: https://bit.ly/3EK2vz (Original version in French by Léa Marchal)