. /.   WORLD TRADE  
ORGANIZATION  WT/COMTD/57/Add.1 
4 May 2006 
 
 (06-2142) 
Committee on Trade and Development Original:   English 
  
 
 
GENERALIZED SYSTEM OF PREFERENCES 
 
Communication from the European Communities  
 
Addendum  
 
 
 The following communication dated 1 May 2006 has been received from Brazil, and is being 
circulated at its request.   
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QUESTIONS BY BRAZIL WITH RESPECT TO THE EUROPEAN COMMUNITIES' 
GENERALIZED SYSTEM OF PREFERENCES (WT/COMTD/57) 
 
Question 1:  Could the European Communities (EC) provide monthly and annual figures in value (in 
US$ or in Euros) and in quantity (kilos or tons) of  imports covered by each arrangement in the EC's 
Generalized System of Preferen ces (GSP) by country and by product (tariff line)?  If not, please 
justify the response.  In this context, Brazil would lik e to point out that GSP tr ade data is not available 
under EUROSTAT and that the Organization for Economic Cooperation and Development (OECD) 
Secretariat declared in a recent report that it "does not have access to detailed official data on preferential imports in the European Union (...)".
1 
Question 2:   How does the EC expect developing countri es to verify whether they meet statistical 
requirements set by the Regulation No 980/2005?  In  this regard, Brazil is especially concerned about 
requirements set by Article 14 of such regulation (g raduation system) on removal of tariff preferences, 
which establishes that data should be extracted  from COMEXT (EUROSTAT) because the current 
system (nor the previous under special subscr iption) does not make GSP-covered products 
information available. 
Question 3:   Tariff preferences for Brazilian products fa lling under Section IV of EC Regulation 
No 2658/87 (prepared foodstuffs;  be verages;  spirits and vinegar;  tobacco and manufactures tobacco 
substitutes) were removed.  Could the EC indicate the rationale behind this decision?  Did the EC 
conduct any research to verify if Brazilian exports of products in that section actually surpassed the 
15% threshold described in Article 14 of Council Regulation No 980/2005 of  27 June 2005?  Could 
the EC provide any supporting analysis or document? 
Question 4:  Why did the EC choose to use a graduation system (Article 14) that affects entire 
sections of the Harmonized System (HS)?  Ot her graduation systems of other GSPs are 
product-specific and therefore do not penalize develo ping countries on more than one item in which 
                                                      
1 [European Commission correspondence with the OECD Secretariat, 22 June 2004].  Trade Preference 
Erosion:  potential economic impacts.   OECD paper, 26 de abril de 2005.  TD/TC/WP(2004)30/FINAL, p.9. WT/COMTD/57/Add.1 
Page 2  
 
  they developed export capability on a competitive b asis.  Brazil is mainly concerned about the 
graduation of Section IV, which comprises chapters 16, 17, 18, 19, 20, 21, 22, 23 and 24 of the HS, 
once a few products reach the 15% threshold.  This  penalizes a large group of other products that 
would have been able to enter the European mark et, had Section IV not been graduated as a whole. 
Question 5:   Why did the EC decrease the graduation threshold of 25% (Article to 12.A of 
Regulation No 2501/2001) to 15% (Art icle 14 of Regulation No 980/2005)? 
Question 6:   What were the reasons for removing the m echanism of review of the graduation system 
in the current GSP regulation?  Will any alternativ e process be available to a country whose specific 
section no longer exceeds the 15% limit?  If in 20 07, Brazil no longer exceeds the 15% threshold on 
Section IV, how would it benefit from the GSP tariff rate in 2008? 
Question 7:  Could the EC provide background information on how the criteria to identify 
"vulnerable" countries such as "1% of GSP-covere d imports to the Community" and "75 % of total 
GSP-covered imports" (A rticle 9.3(a) and (b) of Regula tion No 980/2005) were decided? 
Question 8:   Could the EC provide background informa tion on the criteria used to determine the 
sensitivity of products (Article 7)?  Could the EC provide any supporting documents? 
 
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