Oxfam Slams EU's Updated GSP System

by Ulrika Lomas, for LawAndTax-News.com, Brussels

25 October 2004

International development agency, Oxfam has criticised the updated version of the Generalised System of Preferences (GSP) unveiled by the European Commission last Wednesday, arguing that although the updated system is intended to help developing countries, it is likely to put many of them at a disadvantage when it comes to trading with the EU.

In 1968, the United Nations Conference on Trade and Development (UNCTAD) recommended the creation of a GSP, under which industrialised countries would grant trade preferences to all developing countries. The EU was the first to implement a GSP scheme, in 1971.

The EU's GSP is implemented following cycles of ten years for which general guidelines are drawn up. The present cycle began in 1995 and will expire on 31 December 2005. In July the Commission adopted the guidelines for the period 2006-2015.

However, Oxfam has taken issue with the new criteria used for graduating countries out of the system, an event which the EC describes as "not a penalty (but)...a sign that the GSP has successfully performed its function, at least in relation to the countries and products in question".

Speaking to Reuters last week, head of Oxfam's EU advocacy office, Jo Leadbeater argued that the new system is unfair, revealing that:

"The proposal looks at whether a developing country accounts for 15 per cent of EU imports from the developing world, instead of...all EU imports. The rule means that a developing country may be graduating out of the GSP just as it begins to get its foot on the ladder."

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