EU GSP regulation is extended
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CTA. 2003. EU GSP regulation is extended. Agritrade, December 2003. CTA, Wageningen, The Netherlands.
Permanent link to this item: http://hdl.handle.net/10568/52824
A Commission proposal for a regulation to extend the existing...
A Commission proposal for a regulation to extend the existing GSP scheme until the end of 2005 was tabled on October 29th 2003. This measure is intended to provide space for the formulation of a more comprehensive ten-year GSP regulation once the outcome of WTO negotiations is known. While the regulation has in large part been rolled over, a number of modifications have been made. The first modification relates to the extension of the scope of 'graduation'. Countries and sectors of countries' economies can be graduated out of GSP preferences where they have gained a degree of competitiveness which means that they no longer require the preferences. The new regulation excludes smaller countries which account for less than 1% of imports into the Community from the graduation provisions. This means that the graduation principle will only apply to larger exporters. The second modification relates to the exclusion of certain countries with a higher level of development from the EU GSP scheme, and strengthened provisions for the suspension of the scheme for countries in the case of fraud or unfair social or trade practices. The third modification relates to the retention of special GSP arrangements for certain countries in the context of the fight against drugs. There is currently a challenge to this aspect of the GSP regime in the WTO which could well succeed, requiring modification of this aspect of the WTO regime. The fourth modification relates to the withdrawal of proposed changes to GSP treatment for individual countries under 'graduation' from formal publication in the official journal. Comment: From an ACP perspective the most significant feature of the extension of the GSP regulation is the move towards greater differentiation within the EU's GSP scheme. This could create space for the establishment within the future ten-year GSP regulation of arrangements for non-LDC ACP countries which ensures that those which feel unable to enter into EPAs with the EU do not lose the duty-free access which has supported the development of their exports to the EU under the Cotonou Agreement and the earlier Lomé Conventions. Political pressure will however need to be exerted on the EU to ensure that such an outcome is brought about within the future ten-year framework regulation for the EU GSP scheme.