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EU Reviews Developing Country Trade Policy

by Ulrika Lomas, Tax-News.com, Brussels

17 March 2010


Karel De Gucht, the European Union (EU) Commissioner for Trade, in a speech on "EU Trade Policy Towards Developing Countries" at a seminar in Brussels, has discussed how those countries can be helped to move from being partners in development aid to becoming partners in trade.

In particular, he announced that he has launched a public consultation on the Generalised System of Preferences (GSP), and invited all interested parties inside and outside the EU to make their submissions.

He said that, while the GSP scheme is one of the EU’s key trade instruments to promote economic progress in developing countries, the importance of tariff preferences has been somewhat eroded by liberalization in other contexts, such as free trade agreements (FTAs) – and this process is likely to continue.

“The current GSP scheme is due to expire at the end of 2011 and this is an opportunity to conduct a serious and substantive review, to look at its implementation modalities and to ensure that the GSP responds to the changing economic environment and development needs of poorer countries,” he continued.

“The fundamental question for the review is whether the current GSP objectives remain valid and whether GSP preferences are still the best tool to achieve them. That implies asking the hard questions: is it right that GSP continues to be available to traders who have in the meantime become major global players in international trade with very significant and wide-ranging exports to the EU?”

Other issues he identified were whether the EU should give GSP preferences to countries which already benefit from other preferences granted by the EU, and should the current architecture of GSP – with GSP, GSP+ and ‘Everything But Arms’ – be changed.

He added that: “After an impact assessment, the Commission proposal for a successor regulation can then be expected towards the end of this year or at the very latest during the first quarter of next year. Because the adoption procedure is likely to last beyond the expiry date of the current scheme, we will also submit a proposal to roll over the current regulation, so that we avoid a time-gap in which GSP beneficiaries would lose their preferences from January 1, 2012.”

He also discussed how developing countries are being seen increasingly as equal partners in bilateral and regional FTAs.

“The EU has an active negotiating agenda with developing countries from all corners of the globe,” he confirmed “Three weeks ago, I shook hands on a deal with Ministers from Colombia and Peru; two weeks ago I was in Vietnam and India discussing FTA negotiations at different stages of maturity. These are just a few examples of the agreements in prospect with developing country partners.”

He also saw those agreements as “going beyond tariffs to address issues vital to development such as investment, services and trade-related rules, while taking the particular development needs and situations of partners appropriately into account.”

TAGS: tax | free trade agreement (FTA) | India | law | tariffs | Colombia | agreements | Peru | trade | European Union (EU) | Vietnam | Europe

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