Brussels, 14/10/2004 (Agence Europe) - During Thursday's plenary session, Commissioner Pascal Lamy responded to questioning by the president of the committee on development, Luisa Morgantini (GUE, Italy) and the committee on international trade, Enrique Baron (PES, Spain), by pointing out that the objectives of the planned reform of the GSP for 2006-2015 are to make the generalised system of preferences: a) simpler, by reducing the number of regimes from five to three, in other words making it into a basic scheme, the "Everything But Arms" regime for the least developed countries, and "GSP+" to encourage sustainable development on all fronts (social, environment, fight against drugs, governance, etc). To be able to benefit from this GSP+ scheme, third countries must ratify and apply a range of major international conventions drawn up by international organisations (UN, International Labour Organisation, etc); b) more generous, even thought the EU is "already by far the most generous partner" in the world in terms of trade preferences, with almost 53 billion EUR in trade flows benefiting from preferences (not to mention the ACP regime), compared to just 17 billion dollars for the United States.
In order to make up for the "tariff erosion" which results from multilateral trade negotiations at the WTO, the EU should extend GSP coverage to new products if it hopes to preserve the comparative advantages enjoyed by the least developed countries. The MEPs asked which new products should be included in the list of GSP. "We are discussing this at the Commission at the moment", and it will not be decided on until the Commission takes position next week when it adopts the proposal, said Mr Lamy. With the same goal of making the GSP more generous, the Commission will also propose changes to the system of rules of origin; "Our preferences must be of benefit to the country in question and no other", said Mr Lamy. The Commission's proposal will aim to relax the rule on cumulation of origin, in order to promote the regional integration of the beneficiary countries; c) more concentrated on the countries which need it the most, "which means, in reality, the smallest of the developing countries, which are land-locked and the most vulnerable", and not on those which have managed to attain strong positions on the international markets, "such as China for textiles".
The "Everything But Arms" regime will remain unchanged, Mr Lamy told Dutch MEP Maria Martens (EPP-ED). To make the GSP more targeted, the Commission is proposing to use a sliding-scale system based on the competitiveness of products from the country in question. "The essential criterion will be the market share" of an imported product on the European market. Glenys Kinnock (PES, United Kingdom) asked what would be the threshold for this market share beyond which a product from a GSP beneficiary country will be excluded from the system in the future. "It is too soon to be able to give you a figure", because discussions are still ongoing within the Commission, said Mr Lamy. "But I am in a position to say that, whatever final figure we decide upon [in the proposal of 20 October: Ed], it will only apply to competitive products from the large exporting countries, and will not concern the majority of our GSP beneficiaries", Mr Lamy assured MEPs (such as Maria Martens, who was concerned that countries could also be excluded from the new GSP). The number of beneficiaries of the GSP will be reduced, "but only by a very small number".
The European Parliament would, "of course", have the time and opportunity to take position on this reform of the GSP, "which is important from the point of view of development and also of trade", Mr Lamy told Enrique Baron and the Italian Luisa Morgantini. "Unfortunately, we have serious timetable constraints", due to the fact that the new GSP must enter into force on 1 January 2006, and that the trade operators of the beneficiary countries must have time to familiarise themselves with the new rules: "at least nine or ten months", to prepare themselves for the new requirements. The regulation must also be adopted by the Council no later than the beginning of next year, which will also require the EP to examine the Commission's proposal very soon- next week, in fact, said Mr Lamy. British Green Caroline Lucas voiced her regrets that the Commission had not carried out a "consultation with all the interested parties, including the European Parliament", before presenting its communication.
During the debate, many MEPs- including Helmuth Markov of Germany (GUE) and Patrick Louis of France (Independence and Democracy) asked how the Commission could propose an in-depth reform of the GSP without having an analytic, overall assessment of the results of how well the system has been working for the last ten years. Wrong, said Commissioner Lamy: "The assessment of the GSP results has been done, it exists (…). All the figures we need are available to us, and they show that overall, the system has had positive results, but also that we can improve". Thus between 2000 and 2002, EU imports under the GSP increased from 47 to 53 billion EUR, "a considerable increase", and this despite the fact that certain products have come off the GSP list. The usage rate for the GSP (the ratio between trade flows theoretically eligible for the GSP and imports which actually benefited by it) has gradually increased in recent years to reach 55% currently, explained the Commissioner: "This proves that the system is working". On the other hand, regimes which are currently inactive, particularly social and environmental clauses, "have not had much success", because only two countries (Sri Lanka and Moldova) have actually benefited, said Mr Lamy. "We must take experiences such at these into account", he stressed.
On the GSP+ and the international conventions the beneficiary countries must respect, how will the Commission check that the countries in question are really applying them? several MEPs asked, including Françoise Castex of France (EPP-ED), the Belgian Anne van Lancker (PES) and Daniel Varela Suanzes-Carpegna (EPP-ED). "It is clear that we will seek the ratification of all of these conventions, but not only the ratification, we will also call for their effective application", said Mr Lamy. "We are planning a double assessment", explained the Commissioner: first when the country asks for access to the GSP+, then again by asking the international bodies in charge of overseeing the application of these conventions to carry out an evaluation. "A country such as Belarus, for instance, to whatever level it has ratified the conventions, would not be eligible for the GSP+ today", said Mr Lamy.
The representative of the Dutch Presidency welcomed the objectives and general principles laid down in the Commission's communication, stressing that the Council will obviously expect to be apprised of all the details of the proposals the Commission is to present next week, before taking position on the reform of the GSP overall. Once the proposal is on the table, the Council will lose no time in examining and adopting the new regime, so that the extremely tight timetable proposed by the Commission can be respected, she promised.
When the debate was opened, Luisa Morgantini stressed that the European Parliament "hoped to make its voice heard" from the beginning of discussions on the future GSP regime: on the substance, she was in favour of the Commission's approach, but was surprised to hear that the sliding-scale mechanism proposed consisted of just a market share criterion, taking no account of the degree of development or poverty. Speaking along similar lines, Enrique Baron voiced his hopes that countries which would suffer under the dismantling of the "drugs" programme would get a reasonable transition period. Thanking Pascal Lamy before he left the Commission for his collaboration for so many years, he wished him "every success in your next reincarnation".
The Parliament adopted a resolution which will be published in full in EUROPE/Documents.