Bridges Trade BioRes • Volume 4 • Number 20 • 5th November 2004
NEW EU ‘GSP+’ OFFERS ENVIRONMENT AS CARROT
NEW EU ‘GSP+’ OFFERS ENVIRONMENT AS CARROT
On 20 October, the European Commission adopted a proposal setting out the details for a revised EU Generalised System of Preferences (GSP) scheme for 2006-2008. Included in the package is a new programme, called "GSP+", that would grant duty-free access to the EU for approximately 7,200 products from small and vulnerable countries that sign onto the major multilateral environmental agreements (MEAs) as well as key human rights and governance agreements.
Simplicity, fairness key goals
The new system would reduce the number of GSP arrangements from the current five programmes to three (see BRIDGES Weekly, 27 October 2004). Under previous arrangements, developing countries could use the general scheme that provided preferential access and special schemes for countries promoting the protection of labour rights, environment, combating drug production and trafficking, or belonging to the group of least developed countries (LDCs) (the "Everything But Arms" initiative). Under the new scheme, the general arrangement would remain largely the same, as would the "Everything But Arms" program for LDCs, but the remaining three programmes would be compiled into the "GSP+," reserved for countries that meet new criteria for sustainable development and good governance.
Introducing GSP+
The "GSP+" programme replaces the three former incentive schemes (drugs, social and environment arrangements) by a new single scheme that covers approximately 7,200 products which can enter the EU duty-free from vulnerable countries that accept the main international conventions on social issues, human rights, environmental protection and governance. In order to qualify, countries must demonstrate that they are very small beneficiaries under the GSP (with their GSP-covered imports representing less than one percent of total EU imports under the GSP); and that their economies are poorly diversified and vulnerable. Additional preferences would be immediately granted to those countries that have ratified and effectively implemented the 16 core conventions on human and labour rights, as well as seven (out of 11) conventions related to good governance and the protection of the environment, including all the major MEAs. In any case, beneficiary countries would be required to ratify all 27 conventions by 31 December 2008. Pascal Lamy, the EU Trade Commissioner, said he was "delighted that in today’s scheme, we are also making a sizable and concrete downpayment on sustainable development".
Muted reactions
Non-governmental organisations, in general, spoke out in favour of GSP+ and its attempt to make trade more supportive of environmental goals, while criticising other aspects of the new GSP such as the low threshold for graduating out of the system and the failure to make the rules of origin more development-friendly.
Others were quick to condemn the GSP+ scheme including the Financial Times who described it as a "misguided idea" symptomatic of "woolly thinking" and "thinly veiled protectionism". They suggested that the multilateral system is already weighted down by too many non-trade issues and that the trend would lead to the "entire multilateral system collapsing under the weight of extraneous policy matters which would be better dealt with elsewhere". Also mentioned is the idea that "trade agreements should not be a lever for rich countries to force other governments to implement unrelated policies, however symbolic".
Among the listed conventions are the Kyoto Protocol on Climate Change, the Montreal Protocol on Substances that deplete the Ozone Layer, the Stockholm Convention on persistent Organic Pollutants, the Cartagena Protocol on Biosafety, the Convention on Biological Diversity and the Convention on International Trade in Endangered Species of Wild Flora and Fauna (CITES).
ICTSD Reporting; "Trading in Pieties," FT, 22 October 2004; "EU’s Lamy Urges Parliament to Reform GSP; Labor, Environment Standards to Be Specified," WTO REPORTER, 15 October 2004; "Developing countries: facts and figures on the new EU scheme of trade preferences for 2006-2008," EU, 20 October 2004; "Developing countries: the Commission proposes system of trade preferences for 2006-2008" EU, 20 October 2004.