Brussels, 10/03/2005 (Agence Europe) - By adopting the report of Antolin Sanchez Presedo (Spain, Socialist) on Wednesday, the European Parliament has given its opinion on the new System of Generalised Preferences (SGP) in the EU, which is expected to enter into force on 1 April and expire on 31 December 2006. The entry into force of the new SGP had been put forward by the Council to 1 April instead of 1 July 2005 as initially planned, so that Asian countries affected by the tsunami can benefit as soon as possible from the advantages offered by the new system. Following the vote of the European Parliament (which only has a consultation role), the regulatory on the SGP is expected to be adopted by the General Affairs Council on 16 March.
The regulation will see the new SGP being simplified and reduced to three regimes (in stead of the current five): a general regime, an “Everything but Arms” special regime for the poorest countries and a regime for encouraging development and good governance (“SGP+”). The SGP will also be more focused on countries that are genuinely the most needy, notably through the “phasing in” mechanism. In the context of this mechanism, Parliament and the Commission agree that the SGP should be withdrawn from a country for a product when the country becomes “competitive” on the European market. A given product from a specific country will be considered “competitive” when over three consecutive years, its EU market share exceeds 15% of the total for European exports of the same product under the SGP system. Textiles and clothing: the Commission is proposing market share of 12.5% but the European Parliament is requesting that this ceiling is lowered to 10%. By lowering the Commission's proposed threshold by 2.5%, the EP hopes to exclude some of the big exporters from the SGP system, which have become perfectly competitive in textiles, such as India.
During the debate, Trade Commissioner, Peter Mandelson, disapproved of this amendment as he noted that there were many poor people in India and it had also been affected by the tsunami. Mandelson said that the initial threshold of 12.5% was a good compromise, given that the Council was also divided on the question. Parliament underlined in its resolution that to increase the rate of SGP use and allow developing countries take advantage of the benefits of international trade, the EU had to strive to provide these countries, notably the least advanced, with appropriate technical assistance. Technical assistance also has to be supplied to developing countries that want to meet the demands imposed in the new special regime (“SGP+”) which demands beneficiary countries adopt a series of international conventions on social rights, environmental protection and governance, including the fight against the production and trafficking of drugs. The EP also wants to be informed by the Commission every time the SGP+ regime is refused to a country requesting it. MEPs also requested that the next draft regulation for the SGP on 1 January 2009 be presented before 1 June 2007.