BRUSSELS, Belgium – Officially the EU’s rules which are ensuring that exporters from selected developing countries have an import duty free status on bikes they sell to the EU, ended on December 31, 2011.
However, for these EU rules known as the "Generalised System of Preferences (GSP)” a ‘Roll-Over’ Regulation has been put forward, extending the present system until the end of 2013. But, there’s more going on around GSP as the European Commisson adopted proposals for a review.
"Global economic balances have shifted tremendously in the last decades. World tariffs are at all-time lows. If we grant tariff preferences in this competitive environment, those countries most in need must reap the most benefits. Trade and development go hand in hand and tariff preferences are a small part of our wider agenda to help poorer economies scale up their presence in global markets", said EU Trade Commissioner Karel De Gucht.
Commission put forward comprehensive GSP package
Since 1971, the EU has had rules ensuring that exporters from developing countries pay lower or no duties at all on some or all of what they sell to the EU. This gives them vital access to EU markets contributing to the growth of their economies. This scheme is known as the "Generalised System of Preferences".
The Commission has now put forward a comprehensive GSP package. This includes: a proposal for the continuation of the existing system ("rollover") until the end of 2013, to avoid the lapse of the scheme and allow eligible countries to submit applications for GSP+; and the proposal for a revised scheme (‘review’), to come into force on 1st January 2014.
The ‘Rollover’ has been adopted by the European Parliament and Council of Ministers and was published in May, 2011. The proposal for a new scheme was adopted by the Commission on 10th May, 2011. Its objectives are to focus help on those truly in need; to strengthen GSP+ as an incentive to good governance and sustainable development; and to make the system more transparent, stable and predictable.
The three main variants of the scheme (the overall GSP scheme, the ‘GSP+’ incentive scheme for the respect of labour, human, environmental and good governance rights and rules, and the "Everything but Arms" scheme for least developed countries) are reinforced, by re-adjusting the preferences and ensuring they have a higher impact.
Main features of the proposal
- Concentrating GSP preferences on fewer countries. Whilst the generous product coverage and preference margins would remain unchanged, a number of countries would no longer benefit from the scheme, including:
- Countries which have achieved a high or upper middle income per capita, according to World Bank classification. Such as Saudi Arabia, Qatar, Belarus and Russia.
- Countries that have preferential access to the EU which is at least as good as under GSP – for example, under a Free Trade Agreement or a special autonomous trade regime.
- A number of overseas countries and territories (OCTs), which have an alternative market access arrangement for developed markets.
- Reinforcing the incentives for the respect of core human and labour rights, environmental and good governance standards through the GSP+ scheme.
- Strengthen the effectiveness of the trade concessions for Least Developed Countries through the "Everything but Arms" scheme. Reducing GSP to fewer beneficiaries will reduce competitive pressure and make the preferences for LDCs more meaningful. The EU's EBA scheme is already unmatched by any other developed country.
- Increasing predictability, transparency and stability. The system will become open-ended, while now it is subject to review every three years. This will make it easier and more attractive for EU importers to purchase from GSP beneficiary countries. In addition, procedures will become more transparent, with clear and better defined legal principles.
The proposal will be debated in the Council of Ministers and European Parliament with a view to having the reformed GSP in place on 1 January 2014 at the latest.
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