Brussels, 21/09/2004 (Agence Europe) - The dispute settlement body of the WTO decided on Monday, in an arbitration hearing, that the European Union will have until 1 July 2005 to apply a WTO decision against the tariff preferences it grants to countries which fight drugs trafficking. Further to a complaint filed by India, the WTO ruled last December that the special regime of the generalised system of preferences (GSP) to fight the production and trafficking of drugs- currently applied by the EU to 12 countries to help their farmers to end the growing of crops used in the trafficking of drugs- Pakistan, Bolivia, Colombia, Costa Rica, Ecuador, Salvador, Guatemala, Honduras, Nicaragua, Panama, Peru and Venezuela- discriminates against other countries. This decision was confirmed in appeal last April, but the EU and India have not yet agreed on the duration of the "reasonable period of time" the EU is allowed to come into line with the decision. The EU argued that it needed until 1 January 2006 at least to bring in the changes called for by the WTO; India, on the other hand, demanded that the EU come into line by 3 November this year. The WTO arbitration finally decided in favour of 1 July 2005.
"The deadline we have been given is not as long as we had hoped for, but we will do all we can to come into line with the WTO's decision by next July", said the spokesperson to Commissioner Pascal Lamy. She also stressed that the WTO's verdict would have no impact on the planned reform of the GSP (simplification, greater targeting of countries which really need it), on which the Commission has recently presented a communication (see EUROPE of 8 July, p.8/7). "The WTO recognises that there can be different regimes of GSPs (such as the one for the fight against drugs), as long as the criteria for granting these preferences are clear, transparent and non-discriminatory. This WTO position was already well known when we included in our communication the guidelines for GSP reform, which will fully respect these three elements: clarity, transparency and non-discrimination", said the spokesperson. The Commission will present its legal proposal on the future GSPs in October, the objective being to adopt it- if possible- permanently, before the end of the year, in order to allow the new regime to enter into force on 1 January 2006.