Brussels, 28/06/2005 (Agence Europe) - The new Generalised System of Preferences (GSP) adopted by the Council on Monday (EUROPE 8977) is a “step in the right direction” as it should facilitate access to EU markets for poor countries. Nonetheless, the gains arising from the new regime “will be limited as many of Europe's protectionist measures have been maintained”, Oxfam International states. “Europe could and should do more to show its willingness to help poor people to trade their way out of poverty. The fact that Indian textiles have been left out, (an immediate consequence of fixing the graduation threshold for textiles at 12.5% of the market share) when India's GDP is less than US$500 per capital, 50 times less than France, is unjustified”, Oxfam states. It believes it is now essential for the EU to move forward toward simplifying rules of origin and especially cumulation of origin of goods allowing poor countries to benefit from GSP advantages more easily.
India is one of the countries most directly affected by the new GSP that will take effect on 1 January 2006. Lowering the graduation threshold for textiles to 12.5% of the overall volume imported by the EU under the GSP regime - a market share that India largely exceeds - the Member States have decided that India will no longer benefit from the reduced rates of GSP for exports to the EU. On the other hand, its exports of clothing products will continue to be covered by the GSP, their market share in the EU still being lower than 12.5%. The press cites Indian government sources that consider this change will have “a negative impact” on India's textile industry, all the more as exports from direct competitors, such as Pakistan, Sri Lanka or Bangladesh, will still benefit from reduced rates offered by the new GSP, not only for textiles but also for clothing.