eu generalised scheme of preferences highlights of...

Highlights of the

EU Generalised Scheme of Preferences

(GSP)

DG Trade, Civil Society Dialogue, 5 March 2015

This presentation is a part of the Commission's Info Pack on the EU'sGSP and is best read together with the description in full text of theInfo Pack.

This is not a legal document and has been prepared exclusively forinformation purposes. This should not be used by any party as abasis for any decisions with legal implications. The exclusive legalbasis for the reformed GSP is Regulation (EU) No 978/2012 of theEuropean Parliament and of the Council.

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Table of content

I. EU's GSP – A brief overview

II. GSP - one Regulation, three arrangements

III. GSP+ monitoring

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I. EU's GSP – A brief overview

• The EU's first GSP scheme was introduced in 1971.

• Preferences under the current scheme came into effect on1 January 2014, and the basic rules were set out inRegulation (EU) No 978/2012 of the European Parliamentand of the Council.

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Three different arrangements, which respond to the different trade, financial and development needs of the beneficiaries:

− Standard GSP: tariff reduction on almost 66% of tariff lines (on top of the EU MFN duty-free lines).

− Special Incentive Arrangement for Sustainable Development and Good Governance, GSP+: even more generous tariff reductions on practically the same tariff lines as standard GSP.

− Everything But Arms, EBA: duty-free, quota-free access for all products, but arms and ammunitions.

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I. EU's GSP – A brief overview (2)

II. GSP – one Regulation, three arrangements

1. Standard GSP

A summary:

– Generous reductions on tariffs.

– Applies to approximately 66% of all EU tariff lines.

– A further 25% of EU lines are zero tariff under MFN, meaning thatGSP beneficiaries actually receive preferences on 91% of tariff lines.

– Preferences are granted to countries which:• have a low or lower-middle income classification• do not benefit from another preferential trade arrangement

providing for equivalent or better access to the EU market.

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Standard GSP beneficiaries under reformed GSP

(currently 30 countries):

– Botswana**, Cameroon, Colombia*, Republic of Congo, Cook Islands,Cote d'Ivoire, Fiji, Ghana, Honduras*, India, Indonesia, Iraq, Kenya, Kyrgyzstan, Marshall (Islands), Micronesia (Federate States of), Namibia, Nauru, Nicaragua*, Nigeria, Niue, the Philippines, Sri Lanka, Syria, Swaziland, Tajikistan, Tonga, Turkmenistan*, Ukraine, Uzbekistan, Vietnam

*up to 31 December 2015 (Commission Delegated Regulation (EU) No 1015/2014)

** up to 31 December 2015 (Commission Delegated Regulation (EU) No 1016/2014)

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II. GSP – one Regulation, three arrangements

1. Standard GSP

II. Reformed GSP – one Regulation, three arrangements

2. GSP+

A summary:

– 0% tariffs on essentially the same product categories as thosecovered by the standard GSP.

– Granted to vulnerable countries which make binding undertakings toratify and effectively implement 27 core international conventionscovering human rights, labour rights, environment protection andgood governance.

– Monitoring mechanism ensures continuous dialogue with GSP+beneficiaries and identification of areas where implementation shouldbe improved.

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Beneficiaries:

– Currently, 13 countries benefit from GSP+:

Armenia, Bolivia, Cape Verde, Costa Rica*, El Salvador*, Georgia,Guatemala*, Mongolia, Pakistan, Panama*, Paraguay, Peru*. and thePhilippines.

– The list of GSP+ beneficiaries will be amended as more countriessuccessfully apply for the arrangement.

*Costa Rica, Guatemala, El Salvador, Panama and Peru receive GSP+ preferences until 31 Dec. 2015. This is provided for by Commission Delegated Regulation (EU) No 1015/2014 published on 27 Sept. 2014.

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2. GSP+

Entry criteria on GSP+ :

– Vulnerability / import share criterion: 2% share in all EU GSPimports.

– Vulnerability / non-diversification criterion: 7 GSP sections toconstitute at least 75% of GSP imports from the country concerned

– No entry windows: application can be submitted at any time.

– No perfect implementation of the relevant conventions required atthe outset:

but still need to demonstrate seriousness about the implementation.absence of a serious failure and of a reservation prohibited /incompatiblewith the purpose and objective of any of those conventions.

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2. GSP+

A summary:

– Gives duty-free, quota-free access for all goods except arms andammunition.

– Preferences granted to all Least Development Countries (LDCs).

– By focusing preferences on those most in need, the reformed GSPgives EBA beneficiaries a greater competitive advantage than before.

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3. EBA

49 Beneficiaries:

– Africa (34): Angola, Burkina Faso, Burundi, Benin, Chad, DemocraticRepublic of Congo, Central African (Republic), Djibouti, Eritrea,Ethiopia, Gambia, Guinea, Equatorial Guinea, Guinea-Bissau,Comoros Islands, Liberia, Lesotho, Madagascar, Mali, Mauritania,Malawi, Mozambique, Niger, Rwanda, Sierra Leone, Senegal,Somalia, South Sudan, Sudan, Sao Tome and Principe, Togo,Tanzania, Uganda, Zambia.

– Asia (9): Afghanistan, Bangladesh, Bhutan, Cambodia, Lao (People'sDemocratic Republic), Myanmar/Burma, Nepal, Timor-Leste, Yemen.

– Australia and Pacific (5): Kiribati, Samoa*, Solomon Islands, Tuvalu,Vanuatu.

– Caribbean (1): Haiti.

I. * Samoa ceased to be an LDC in 2014 and has a transitional period of three years where it can benefit from EBA (until the end of 2016).

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3. EBA

Dynamic nature of GSP legal framework (recall past legislation):

• 7 Commission Delegated Regulations modifying the lists of beneficiaries (Reg. 154/2013, Reg. 1421/2013, Reg. 1/2014, Reg. 182/2014, Reg. 1015/2014, Reg. 1016/2014, Reg. 1386/2014)

• 2 Commission Delegated Regulations setting our procedural rules for GSP+ arrangement (Reg. 155/2013) and application of temporary withdrawal mechanism and of safeguard measures (Reg. 1083/2013)

• 1 Commission Implementing Regulation providing for the list of graduated sections for 2014-2017 (Reg. 1213/2012)


Legislative update

India: S-5: mineral products; S-6a: inorganic and organic chemicals; S-6b: chemicals, other than organic and inorganic chemicals; S-8a: raw hides and skins and leather; S-17b: road vehicles, bicycles, aviation and space, boats and parts thereof. S-11a: textiles, remains graduated.

Indonesia: S-1a: live animals and animal products excluded fish; S-6b: chemicals, other than organic and inorganic chemicals; S-3: animal or vegetable oils, fats and waxes remains graduated.

Nigeria: S-8a: Raw hides and skins and leather

Ukraine: S-17 a: Railway and tramway vehicles and products


List of graduated sections 1 January 2014 to 31 December 2016

Country coverage: 92 beneficiaries (countries and territories)

Product coverage:

• 6,165 products (tariff lines) under the standard GSP

• 6,222 products under GSP+

• 6,968 products under EBA

Volume and value of GSP imports (under all the three arrangements):

• Total GSP preferential imports worth of €51.4bn

Largest GSP users:

• India (€18.5bn), Bangladesh (€10.3bn), Indonesia (€4.8bn), Vietnam (€2.9bn), Pakistan (€2.6bn), Cambodia (€2.3bn)

Most important product sections:

• Clothing (€19.7bn), machinery (€3.6bn), mineral products (2.4), fish (€2.1.bn), footwear (€2.5bn)


Key Statistics

Panama, Guatemala, Costa Rica, El Salvador

Bolivia,EcuadorParaguayPeru

Cape Verde

Mongolia

PhilippinesPakistan

Armenia, Georgia


GSP+ beneficiary countries

- Legal obligations

- Art 13: COM "shall keep under review" GSP+ beneficiaries' compliance

- Art 14, 40: COM report to EP and Council on GSP+ implementation every two years. First report due on 1 January 2016. Legislative mid-term review by 21 November 2017.

- Art 15, 19: to open investigations for temporary withdrawal, when warranted

- Maximise impact of GSP+ by:

- An active role of beneficiary countries: onus on them to prove positive record on implementation (Art 15.2)

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Why GSP+ monitoring?

The monitoring mechanism is based on two pillars:

− a continuous dialogue and

− the list of issues or "scorecard": snapshot of shortcomings in implementation.

GSP+ beneficiary country is requested:

- To maintain the ratification and ensure effective implementation of the 27 core international conventions

- To comply with the reporting and monitoring requirements of the conventions;

- To participate in and cooperate with the monitoring procedure led by the European Commission.

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How we do GSP+ monitoring?

The continuous dialogue necessary to:

- Explain and clarify procedures

- Discuss problems and concerns

- Assess progress made

The continuous dialogue is based on existing channels of communication (no additional structures / layers created):

- Bilateral meetings with the EU Commission, EEAS, EU Delegation

- Written exchange of notes and documentation

- "Scorecards" facilitating dialogue

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Pillar 1 - dialogue

Georgia (Human Rights Dialogue, 19 June 2014)

Pakistan (GSP+ monitoring visit, 23 - 26 June 2014)

Peru (1st technical meeting on Human Rights, 11 July 2014)

Costa Rica, Panama, Guatemala (GSP+ monitoring visit, 17-24 October 2014)

Bolivia (High-Level Dialogue, 18 November 2014)

Paraguay (trade meeting, 26 November 2014)

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Dialogues in 2014

The continuous dialogue is based on a Scorecard. It is a "working" document clarifying salient shortcomings in implementing effectively the 27 relevant conventions.

Scorecards are:

- identical format for all countries, but country-specific in their content

- regularly updated (once a year)

- essential to show the progress in implementation

- sources of information: reports of relevant monitoring bodies and other "accurate and reliable" sources.

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Pillar 2 - scorecards

- The EU law does not require a GSP+ country to solve ALL the issues listed in the scorecard in a matter of a few months! It is a long and difficult process.

- The EU expects instead a GSP+ country to show genuine progress and serious commitment from the political leadership and public authorities in addressing and solving those problems. They are encouraged to prioritise solving the problems over a time-period.

- GSP+ is not a punitive tool, but an instrument aiming at supporting a country's efforts in implementing the conventions.

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Pillar 2 - scorecards

Scorecard sample - ChapeauGENERAL COMMENTS

On all of the conventions below please provide information on:

1. concrete developments/achievements on implementation;

2. country actions and priorities for the period 2014-2015 (please make reference to or update your previous response as necessary);

3. country actions and priorities for the medium/long term; and

4. elaborate, if applicable, on national limitations and capacity constrains when implementing these conventions.

COUNTRY'S RESPONSE

GSP+ monitoring mechanism

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Sample Scorecard

CONVENTIONS SALIENT SHORTCOMINGS / ISSUES REPORTING TO MONITORING BODY

Designation Description Information Source

Date Reporting Status

Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment

Convention concerning Forced or Compulsory Labour, No. 29

CITES

UN Convention against corruption


Sample Scorecard

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– EU Delegations

– EEAS (Human Rights Conventions);

– DG EMPL (Labour Rights Conventions)

– DG CLIMA, DG ENV and DG SANCO (Multilateral Environmental Agreements)

– DG HOME (Good Governance Conventions)

– DG DEVCO (overall development policy, addressing capacity constraints)

– Legal Service will oversee that the EU laws are applied correctly and consistently

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Multiple actors in the Commission


Stimulate change

Thank you for your attention…

and questions!

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More information on the EU's reformed GSP :

DG TRADE's dedicated website:

http://ec.europa.eu/trade/policy/countries-and-regions/development/generalised-scheme-of-preferences/

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