. /.   WORLD TRADE  
ORGANIZATION  WT/COMTD/57/Add.4 
18 May 2006 
 
 (06-2423) 
Committee on Trade and Development Original:   English 
  
 
GENERALIZED SYSTEM OF PREFERENCES 
 
Communication from the European Communities
 
 
Addendum  
 
  The following communication dated 15 May 20 06 has been received from Pakistan, and is 
being circulated at its request.  
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QUESTIONS BY PAKISTAN ON THE EUROPEAN COMMUNITIES' 
GENERALIZED SYSTEM OF PREFERENCES (WT/COMTD/57) 
 
 
Question 1:  The 'Special Incentive Arrangement for sustainable development and good 
governance' under the European Union's new Generali zed Scheme of tariff Preferences to run through 
1 January 2006 – 31 December 2008, requires that de veloping countries must ratify conventions in the 
field of human rights;  labour rights;  sustai nable development and good governance in order to 
qualify for additional preferences.  There is conseque ntly no nexus between the 'economic advantages' 
accorded and the 'economic problems' faced by the reci pients.  Rather the beneficiaries are required to 
assume legally binding commitments in the form of ratifying 27 conventions.  Would the EC please 
clarify if this scheme is responding to 'development needs' or imposing 'policy choices' on beneficiary 
countries?   
Question 2:  The Appellate Body Report in paragraph 145 in the EC – Tariff Preferences  case 
stated that the GSP preferences must be "non-reci procal".  With respect to the special incentive 
scheme for sustainable development and good governance,  is the grant of preferences in return for the 
commitment to adhere to a set of treaties "non-reci procal" within the meaning of the Enabling Clause?  
Are GSP preferences not temporary privileges that may be withdrawn at any time?  Did the drafters of the 'Enabling Clause', have the objective of th e exchange of these preferences against treaty 
obligations?  
Question 3:  Article 9 paragraph 3(b), Special Incentive  Arrangement for sustainable development 
and good governance, states that a vulnerable count ry is one whose GSP-covered imports to the 
Community represent less than 1 per cent in value of  total GSP-covered imports to the Community.  
A country may be a relatively high income country but fulfil the requirement of less than 1 per cent 
of the EC's GSP imports and qualify while, a lo w-income country, but with 1.1 per cent of 
GSP-covered exports to EC fails to  qualify.  We would like EC to explain if this is an objective 
criterion? WT/COMTD/57/Add.4 
Page 2  
 
  Question 4:  According to Article 9, the benefits under the Special Incentive Arrangement for 
sustainable development and good governance are c onfined to those that have ratified 14 of the 
specified 16 conventions in Annex III-A, and put  them into effective implementation by 
31 October 2005.  If a developing country were to subsequently ratify all of these conventions and 
effectively implement them such country would still not qualify for additio nal benefits under the 
Arrangement.  This means that the list of benefici ary countries is limited only to those that ratify and 
effectively implement the necessary conventions.  In EC – Tariff Preferences , case the Appellate 
Body (paragraph 188) noted a similar feature of the Drug Arrangements, and stated that "such a 
'closed list' of beneficiaries cannot ensure that  the preferences under the Drug Arrangements are 
available to all GSP beneficiaries suffering from illic it drug production and trafficking".  Would the 
EC please comment?    
Question 5:  With regard to Special Incentive Arrangement for sustainable development and good 
governance, why was a deadline of only a few mont hs, given to applicant countries to ratify the 
outstanding treaties- figuring in Part A of the Anne x III?  If the EC had the genuine desire to assist 
countries achieve good governance and sustainable devel opment, more time would have been given to 
other countries to meet those requirements.  This is  particularly important in view of the serious 
impact that ratification of some of the treaties would have had on the societies of the ratifying countries.   
Question 6:  With respect to the requirement of Article 9 paragraph 1(a) of the special incentive 
arrangement for sustainable development and good governance, on the basis of what criteria has the EC selected the conventions listed in the Annex III- A, for ratificati on and effective implementation?  
In particular the United Nations considers seven conventions to be core human rights conventions, 
why has the EC included the first six, but not the seventh core convention, namely convention on the 
Protection of the Rights of all Migrant Workers and Members of their Families?  
 
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