. /.   WORLD TRADE  
ORGANIZATION  WT/COMTD/57/Add.2 
4 May 2006 
 
 (06-2154) 
Committee on Trade and Development Original:   English 
  
 
GENERALIZED SYSTEM OF PREFERENCES 
 
Communication from the European Communities
 
 
Addendum  
 
  The following communication dated 2 May 2006 has been received from China, and is being circulated at its request.  
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QUESTIONS AND COMMENTS ON THE GENERALIZED SYSTEM 
OF PREFERENCES OF THE EUROPEAN COMMUNITIES (WT/COMTD/57) 
  China welcomes the notification by the Europ ean Comunities (EC) of its new Generalized 
System of Preferences (GSP), which came into force as from 1 January 2006.  This paper sets out China's preliminary comment, as well as some clarif ication that we would like to seek from the EC on 
several elements in the notified GSP, without pr ejudice to China's rights under the relevant WTO 
provisions. 
 
1. Renewal mechanism for a product to reclaim the GSP treatment 
 Is there any renewal mechanism for a produc t, which is graduated from the scheme, to 
reclaim the GSP treatment in the fu ture, if the product meets EC's current criteria to benefit from GSP 
treatment?  
 EC's new GSP scheme only prescribes the mechanism for graduation of a product, but there 
are no definite provisions as to how a product can r eclaim the preferential treat ment in the future.  
This has affected the transparency and legal ce rtainty of the new GSP scheme, which renders it 
difficult for exporters in the beneficiary countries to  assess, in a predicable manner, the treatment of 
its products in the EC market. 
 
 It would be appreciated if the EC could defi ne the renewal mechanism for a product so that 
the GSP treatment could be reclaimed.  
2. Preferential rules of origin 
 In accordance with the provisions on rules of or igin in the new GSP scheme, the origin of a 
product could be decided, based on accumulation, for countries which are parties to a entity of regional economic integration.  Since China is a member of the APEC and has a regional trade 
agreement with ASEAN, can China's products en joy GSP treatment based on origin accumulation 
within APEC and ASEAN-China?  WT/COMTD/57/Add.2 
Page 2  
 
  3. GSP-Plus arrangement 
 In EC's previous GSP scheme, there was sp ecial arrangement for c ountries which had taken 
effective steps to protect tropical rain forests.  The products of tropical rain forests could enjoy tariff 
reduction by 15-30%.  Does the new GSP-plus arrange ment contain similar provisions?  In cases 
where applications under the old GSP-plus schem e have not been fully processed, is there any 
transitional arrangement to conti nue processing of these applications? 
  China strongly encourages the EC to give timely  and appropriate consid eration to application 
for the GSP-plus treatment, so as not to  nullify the value of such arrangement. 
 4. Transparency 
 China urges the EC to enhance transparency of its policies in relation to GSP.  Information on 
utilization by the beneficiary countries of the G SP should be published regu larly through official 
channels.    
 While the EC has published trade data on the Helpdesk website, data on products enjoying the 
preferential treatment provided for in the GSP scheme is not available.  Since graduation of a product 
is decided upon the share of trade value of that prod uct from a particular country in the total value of 
that product enjoying preferential treatment, the cr iteria for product graduation is not transparent.  
  For the sake of transparency, China expects the EC to publish periodically, through official 
channels, trade data of the products enjoying GSP treatment and submit such data to the WTO.  We 
would like to propose that the EC make publicly av ailable, by March each year, trade data of the 
previous year.  Data will include, inter alia , trade value of a product at the specific tariff lines level, 
margin of preference, and share of the product of each  beneficiary country in the total value of EC's 
import of that product under the GSP scheme.  
 
 Moreover, the Hong Kong Ministerial Declar ation has requested developed Members to 
provide duty-free and quota-free treatment to products  originating from the least-developed countries.  
We would like to know the percenta ge coverage of products origina ting from the LDCs that are given 
duty-free and quota-free treatment by the EC, both in terms of tariff lines and trade value.  
 
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