Brussels, 10/02/2005 (Agence Europe) - In order to help the Asian countries which fell victim to last December's tsunami, the European Commission proposed on Thursday to bring forward by three months (1 April instead of 1 July 2005) the implementation of the new generalised system of preferences (GSP) granted to developing countries. The trade experts of the Member States (“133 Committee”) recently agreed to this initiative (EUROPE of 22 January 2005, p.7). The Council is still to agree to this proposal formally, upon consultation of the European Parliament.
The GSP allows developing countries to be granted preferential access to the European market. The reform, which refers to the period from 1 April 2005 to 31 December 2008, allows this mechanism to be simplified and for a “GSP Plus” system to be set up for the most vulnerable developing countries, such as Sri Lanka, one of the worst-hit countries. By virtue of this “GSP Plus” system, 90% of Sri Lankan exports to the EU, including textile and clothing products, will benefit from a zero customs duty rate. For Thailand, which is eligible for the general GSP regime, customs duty on shrimps, one of the country's main exports, will be reduced from 12% to 4.2%. India and Indonesia will also enjoy a small advantage for textiles and shoes: a reduction from 12 to 9.5% of customs duty on textile and clothing products sold by India in Europe and a reduction from 17 to 13.5% of customs duty on shoes made in Indonesia (and also in Thailand).
The proposed regulation contains no costs to be charged to the budget of the EU. However, its implementation will bring about losses in customs revenue estimated at 2.2 billion EUR a year.
The Commission has also confirmed that it hopes to modify the rules of origin attached to the GSP. It is a question of taking these rules into account at regional level, for a piece of clothing produced in Sri Lanka to benefit from the “GSP Plus” system even if the fabric comes from another country, for example.