EU finalises shake-up of GSP trade preference scheme
The European Union has released details of planned changes to its Generalized System of Preferences (GSP) system for developing countries, which are due to come into effect from the beginning of 2014.
The preferential import scheme, which offers reduced or zero tariff rates to countries in need, will in future be focused on fewer beneficiaries.
At the same time, more support will be provided to countries who are serious about implementing international human rights, labour rights and environment and good governance conventions, the EU said.
The update will reduce the number of countries that enjoy preferential access to EU markets from 176 to 89.
Beneficiaries are 49 least developed countries in the Everything But Arms scheme, and the other 40 are low and lower-middle income partners who are expected to enjoy more opportunities to export as competitors exit the scheme. These countries include Bangladesh, Cambodia, Lao, Vietnam, India and Sri Lanka.
Countries who will no longer benefit include 33 overseas countries and territories with their own market access regulation, as well as 34 countries with other trade arrangements with the EU. They will be able to re-join the scheme if their circumstances change. Among those losing their GSP status are Mexico, South Africa, Egypt, Morocco, and Tunisia.
The updated GSP also removes tariff preferences from countries which have been listed by the World Bank as high or upper middle income economies for the past three years. The move will hurt countries like Brazil, Argentina, Malaysia, Russia and Saudi Arabia.
The GSP+ concession, which grants extra duty-free preferences to vulnerable developing countries, currently applies to Armenia, Azerbaijan, Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Honduras, Mongolia, Nicaragua, Peru, Paraguay and Panama.
At the moment, a country is only eligible if its exports under the GSP represent less than 1% of the EU's imports from all GSP beneficiaries. But from 1 January 2014, this will be relaxed from 1% to 2% - meaning Pakistan, the Philippines and Ukraine will be able to apply for zero duties on their exports to the EU under the GSP+ scheme.
The process of graduation, or suspending tariff preferences for a country, currently kicks in for textiles and apparel when shipments to the EU exceed 12.5% of GSP imports of a particular product. The EU is now increasing the graduation thresholds to 14.5% for textiles and apparel.
Also included in the changes is a stiffening of safeguards for the EU textiles sector to ensure that the GSP+ concession does not lead to import surges that harm EU textile and clothing producers.
The changes, which have been backed by EU Member States and the European Parliament, recognise that "key developing economies have become globally competitive," said EU Trade Commissioner Karel De Gucht.
"This now allows us to tailor our pro-development trade scheme to give the countries still lagging behind some additional breathing space and support."
The new GSP provisions will take effect from 1 January 2014, and will remain in place for ten years.
Country changes under the new GSP scheme
Everything But Arms beneficiaries:
- 33 in Africa (Angola, Burkina Faso, Burundi, Benin, Chad, Congo (Democratic Republic of), Central African (Republic), Djibouti, Eritrea, Ethiopia, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau, Comoros Islands, Liberia, Lesotho, Madagascar, Mali, Mauritania, Malawi, Mozambique, Niger, Rwanda, Sudan, Sierra Leone, Senegal, Somalia, Sao Tome and Principe, Togo, Tanzania, Uganda, Zambia);
- 10 in Asia (Afghanistan, Bangladesh, Bhutan, Cambodia, Lao, Maldives (until end 2013 as it has exited the UN Least Developed Country list), Myanmar/Burma (preferences currently withdrawn), Nepal, Timor-Leste, Yemen);
- 5 in Australia and Pacific (Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu)
- 1 the Caribbean (Haiti). ?These partners will enjoy more opportunities to export as competitors exit the scheme.
Low and lower middle income beneficiaries:
- Armenia, Azerbaijan, Bolivia, China, Cape Verde, Colombia, Congo (Republic of), Cook Islands, Costa Rica, Ecuador, Georgia, Guatemala, Honduras, India, Indonesia, Iran, Iraq, Kirghizia, Marshall (islands), Micronesia (federate States of), Mongolia, Nauru, Nicaragua, Nigeria, Niue, Pakistan, Panama, Paraguay, Peru, the Philippines, El Salvador, Sri Lanka, Syrian (Arab Republic), Tajikistan, Thailand, Tonga, Turkmenistan, the Ukraine, Uzbekistan, Vietnam.
Countries who will no longer benefit:
- Anguilla, Netherlands Antilles, Antarctica, American Samoa, Aruba, Bermuda, Bouvet Island, Cocos Islands, Christmas Islands, Falkland Islands, Gibraltar, Greenland, South Georgia and South Sandwich Islands, Guam, Heard Island and McDonald Islands, British Indian Ocean Territory, Cayman Islands, Northern Mariana Islands, Montserrat, New Caledonia, Norfolk Island, French Polynesia, St Pierre and Miquelon, Pitcairn, Saint Helena, Turks and Caicos Islands, French Southern Territories, Tokelau, United States Minor Outlying Islands, Virgin Islands - British, Virgin Islands- US, Wallis and Futuna, Mayotte.
- Euromed (6): Algeria, Egypt, Jordan, Lebanon, Morocco, Tunisia
- Cariforum (14): Belize, St. Kitts and Nevis, Bahamas, Dominican Republic, Antigua and Barbuda, Dominica, Jamaica, Saint Lucia, Saint-Vincent and the Grenadines, Barbados, Trinidad and Tobago, Grenada, Guyana, Surinam
- Eastern Southern Africa (3): Seychelles, Mauritius, Zimbabwe
- Pacific (1): Papua New Guinea
- Economic Partnership Agreement Market Access Regulation (8): Côte d'Ivoire, Ghana, Cameroon, Kenya, Namibia, Botswana, Swaziland, Fiji
- Other (2): Mexico, South Africa
Also being removed are high or upper middle income economies:
- 8 high-income partners (Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates, Oman, Brunei Darussalam; Macao) and
- 12 upper-middle income partners (Argentina, Brazil, Cuba, Uruguay, Venezuela; Belarus, Russia, Kazakhstan; Gabon, Libya, Malaysia, Palau).
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