EN Official Journal of the European Union C 66/1

Commission Report pursuant to Article 28(3) of Council Regulation (EC) No 980/2005 of 27 June 2005 applying a scheme of generalized tariff preferences

(2008/C 66/01)

TABLE OF CONTENTS

1. INTRODUCTION

1.1. General overview

1.2. Methodology and Terminology

2. ANALYSIS OF THE EVOLUTION OF PREFERENTIAL IMPORTS

2.1. The General Arrangement

2.1.1. The Coverage of the General Arrangement

2.1.2. The Utilisation Rate of the General Arrangement

2.1.3 Graduation from the General Arrangement

2.2. The GSP+ Special Arrangement

2.2.1. The Coverage of the GSP+ Arrangement

2.2.2. The Utilisation Rate of the GSP+ Arrangement

2.2.3. Graduation from the GSP+ Arrangement

2.3. The ‘Everything But Arms’ Initiative

2.3.1. The Coverage of the Arrangement for the LDCs

2.3.2. The Utilisation Rate of the EBA Arrangement

2.3.3. Graduation from the EBA Arrangement

3. PREFERENTIAL MARGINS UNDER THE GSP

4. THE IMPACT ON THE COMMUNITY BUDGET

5. CONCLUSION

ANNEX I: Beneficiary Countries under all GSP Arrangements

ANNEX II: Variation of Preferential Imports of the GSP

ANNEX III: Countries/Sectors Graduated from the General Arrangement

ANNEX IV: GSP — Statistics for All Beneficiary Countries

1. INTRODUCTION

1.1. General overview

The European Union’s (EU) Generalised System of Preferences (GSP) is the earliest and most generous scheme implemented of all developed-countries preference systems, facilitating trade for 178 developing countries. Its objective is to assist developing countries to reduce poverty as well as to promote sustainable development and good governance by helping to generate revenue through the integration into international trade by granting better access to the EU.

These goals are meant to be supported by either complete duty free access of products or tariff reductions for exports to the Single Market.

For the period of 1st January 2006 to 31st December 2008, the renewed scheme foresees three types of arrangements for their beneficiaries: firstly the general arrangement, secondly the special arrangement for sustainable development and good governance and thirdly, the arrangement for the least developed countries (LDCs), the so called ‘Everything but Arms’ (EBA) initiative.

The EU's GSP (1) is implemented following cycles of ten years to provide greater continuity and a more stable scheme. The latest guidelines for the period 2006-2015 were adopted in 2004 (2).

Under the general arrangement which covers about 6 400 products of about 10 000 tariff lines of the EU, non-sensitive products (just over 3 200 and representing slightly more than half of the products covered) enjoy duty-free access, while sensitive products (just under 3 200 tariff lines, divided between agricultural products, textile, clothing, apparel, carpets and footwear) benefit from a tariff reduction of 3,5 percentage points of ad valorem duties compared to the most favoured nation (MFN) tariff and a 30 percent reduction of specific duties (with a few exceptions) (3). For textiles and clothing, the reduction is 20 percent of the ad valorem MFN duty rate (4).

The arrangement for sustainable development and good governance (GSP+) allows duty-free entry to the EU market of all the goods covered by the general GSP scheme (5). The GSP+ regime currently includes 15 countries, four of the ANDEAN Community (Bolivia, Colombia, Ecuador, and Peru); six Central American countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Venezuela), two from Eastern Europe (Republic of Moldova and Georgia) and two countries from Asia (Sri Lanka and Mongolia).

Previous GSP Regulation provided a special arrangement for the least developed countries (LDCs) under which these countries enjoyed virtually the same preferences as under the Lomé agreement for ACP countries. In February 2001 (6), the EBA initiative was introduced, broadening the product coverage of this special arrangement by including 926 new tariff lines (7). Today, the EBA gives the 50 LDCs duty free access to the EU for all products, except arms and ammunition and 41 tariff lines of agricultural products, mainly rice and sugar, which will be liberalised in 2009.

The objective of concentrating the GSP on countries most in need is managed by ‘graduating’ the most competitive product sectors from certain beneficiaries. Given their high level of competitiveness, there is no further justification to continue benefiting from preferential tariffs — thus the WTO MFN tariffs apply. Graduation from the GSP scheme is a sign that the scheme has successfully supported the integration, of a particular country and a specific product section, into international trade by having gained competitiveness.

Under article 28 of Council regulation (EC) No 980/2005, the Generalised Preferences Committee is called up to examine:

‘the effects of the scheme, on the basis of a report from the Commission covering the period from 1 January 2006. This report shall cover all preferential arrangements referred to in Article 1 (2) and be presented in time for the discussion on the next Regulation.’

The present report examines all three GSP arrangements; covers a period of three years from 1st January 2004 to 31st December 2006, although particular attention is given to the years 2005 and 2006 when the new GSP entered into force.

1.2. Methodology and Terminology

Certain beneficiary countries of the GSP may also benefit from other preferential arrangements such as the Cotonou Agreement or a bilateral free trade agreement (FTA). As import statistics do not always provide clear information on the nature of the preferences that were actually used for specific imports, it would be of importance to analyze the overall rate of preference utilisation. Since the Cotonou Agreement or bilateral FTAs go further in terms of coverage and depth of preferences than the general GSP arrangement countries used to the arrangements, i.e. under Cotonou, were not to change to the GSP arrangements. Thus the utilisation rates of GSP may be biased downwards.

The report examines preferential imports from 107 beneficiaries (8), i.e.

— 42 countries benefiting from the general arrangement,

— 50 least developed countries,

— 15 countries benefiting from the special arrangement for sustainable development and good governance.

The total amount of imports covered by these countries is 90 %.

To analyse the coverage of the three arrangements, the report only took into account the years 2005 and 2006 since the information provided by the year 2004 would have been redundant.

The calculation of the average preferential margin has been done on a theoretical basis, adding the preferential margin that each tariff line benefits under each of the arrangements and dividing the total preferential margin obtained by the total number of tariff lines under the respective arrangement. Following this methodology, we have tried to eliminate all possible distortions coming from the introduction of the volume of trade. Indeed, the volume of trade could bias the result towards the arrangement that either utilise the highest number of tariff lines, and/or the highest volume of trade under each tariff line.

Additionally, when calculating the average preferential margin it is referred exclusively to tariffs applied, no conversion of specific levies on products to tariff equivalents is carried out.

Eligible imports: imports of products for which the country of origin is entitled to GSP treatment.

Preferential imports: imports of products for which GSP treatment has actually been asked for.

Utilisation rate: the ratio of preferential imports to eligible imports. It indicates the share of imports which have actually been asked for tariff preferences in the total amount of imports for which such preferences are available.

‘Loss’ of income: the potential loss of EU customs revenue due to application of preferences, under the strong assumption that trade would remain the same in a situation with no preferences

Preferential margin: difference between MFN tariff and preferential tariff expressed as a percentage point. Example: a tariff preference of 30 % from an MFN duty of 10 % gives a preferential margin of 3 percentage points and a preferential tariff of 7 %.

Table X

Example for country X, fish products

(Euro Mio) Product MFN Tariff SPG Tariff Preferential Margin Eligible Imports Loss of Income 03056980 12 0 12 1,80 0,22 03061310 12 3,6 8,4 0,09 0,01 03061350 12 3,6 8,4 225,52 18,94 03061380 12 3,6 8,4 16,17 1,36 03061110 12,5 0 12,5 0,71 0,09 03061190 12,5 0 12,5 0,37 0,05 Total 10,37 244,66 20,66 10,37 = sum (preferential margins)/number of product lines.

All statistical figures have been obtained from Eurostat.

2. ANALYSIS OF THE EVOLUTION OF PREFERENTIAL IMPORTS

Given that the new scheme has only been applied since 1st January 2006 (9) and beneficiary countries might not have used the new instruments to their full extent, definitive conclusions cannot yet be drawn.

With the entering into force of the new GSP scheme on 1st January 2006, approximately 250 new products of interest for developing countries were introduced into the GSP product list, comprising mainly fish, prepared fruits and vegetables. Moreover, preferential margins (currently 3,5 percentage points for sensitive products and 100 % for non-sensitive products) were maintained.

Imports of these newly introduced products into the GSP increased in 2006 by 19 % (3,9 billion euro) in comparison with 2005 (3,3 billion euro). What is more outstanding is the growth of preferential imports that nearly tripled showing that the new products included into the GSP are of significant importance for developing countries exports. These consisted mainly in fish products.

Table 1

All GSP countries: New GSP products

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 Total imports 2 742 3 300 20 % 3 938 19 % 44 % Eligible imports 652 835 28 % 3 881 364 % 495 % Preferential imports 352 486 38 % 1 268 161 % 260 % Utilisation rate 54 % 58 % 8 % 33 % –44 % –39 % Statistical calculations include all 178 GSP countries.

Small and middle sized countries from Asia and South America benefited from the new preferences (for example: Vietnam, the Philippines, Sri Lanka, the Maldives, Ecuador, Colombia, and El Salvador).

If the imports of the largest GSP exporters to the EU (10) are excluded from the total GSP imports in 2005 and 2006, the value of imports from the remaining 164 smaller GSP exporters increased by 6 % reaching 10,6 billion EUR.

Table 2

GSP Countries without 14 biggest economies

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 Total imports 148 476 192 008 29 % 219 476 14 % 48 % Eligible imports 34 361 34 721 1 % 42 766 23 % 24 % Preferential imports 7 403 10 063 36 % 10 671 6 % 44 % Utilisation rate 22 % 29 % 35 % 25 % –14 % 16 % Statistical calculations include 164 GSP countries.

Even more, in the first year of implementation of the new scheme, imports from small economies and LDCs recorded the largest import increases. Within the top 50 performing countries only four are, so called, bigger economies. Twenty-six small economies within this group increased their EU GSP exports over 100 %. The EU preferential imports from the remaining bigger economies increased either by less than 30 % (India 14 %, Brazil 26 %) or even decreased (China –67 %, South Africa –36, Russia –35) (11).

Specifically for the textiles and clothing sector, (Section XI of the CN) — a sector in which the biggest GSP competitor on the EU market is graduated (China) — the largest increases of imports came from small economies such as Fiji, Haiti, Tunisia, Niger, Afghanistan, and Sri Lanka (in relative not in absolute terms) (12).

2.1. The general arrangement

2.1.1. The coverage of the general arrangement

For 2006, the general arrangement includes 6 379 tariff lines of which 3 206 benefit from 100 % preference and 3 173 enjoy a tariff reduction from the MFN tariff. Compared with the previous arrangement, in 2006, the new general arrangement introduced 217 additional tariff lines, of which 16 enjoy additional 100 % preference (11 industrial and 5 agricultural products) and 201 benefit of a tariff reduction in relation with the MFN tariff.

The number of tariff lines described as ‘Not in GSP’, in table 3, reflects the difference between the total number of tariff lines benefiting from a preference under the GSP general arrangement (6 379 for 2006) and the number of tariff lines under the MFN system that are dutable (7 280). The agricultural sector is the one that still has the most numerous number of tariff lines not yet liberalised.

Table 3

Coverage in terms of number of lines by sectors of the general arrangement

GSP 2006 GSP 2005 GSP 2005-2006 Sector No lines 0 (13) <> 0 (14) not in GSP No lines 0 <> 0 not in GSP No lines 0 <> 0 not in GSP Agricultural 1 172 103 1 069 762 950 98 852 995 222 5 217 – 233 Textiles 1 169 0 1 169 7 1 172 0 1 172 7 –3 0 –3 0 Industrial 4 038 3 103 935 132 4 040 3 092 948 122 –2 11 –13 10 Total 6 379 3 206 3 173 901 6 162 3 190 2 972 1 124 217 16 201 – 223

The first conclusion it can be reached from this analysis is that the general arrangement has been improved since it not only includes additional tariff lines but also introduces additional preferential treatment.

2.1.2. The Utilisation Rate of the General Arrangement

The average utilisation rate of the general arrangement has maintained relatively stable on figures around 50 % with an increase in the industrial and textile products and a reduction for agricultural products for the three years under consideration. Nevertheless, it is the agricultural sector the one to show the highest utilisation rates and also the one to present the highest increase of growth rate for its preferential imports (76 %).

If we compare the utilisation rate of the general arrangement with the average utilisation rate of the three arrangements; its yearly utilisation rates are all under the average of the three arrangements.

However, this comparison hides sectoral performance. The utilisation rates for the agricultural and industrial sectors have all been over the average utilisation rate of the three arrangements. It is the worse performance of the textile sector that has more than compensated the best performance of the other two sectors.

Utilisation rates for each of the countries are available in Annex IV.

Table 4

Development of preferential imports as well as their share in eligible imports, i.e. the utilisation rate of preferences available under the general arrangement

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 value value growth value growth growth Total imports 407 460 519 689 28 % 608 304 17 % 49 % Eligible imports 75 003 72 051 –4 % 85 338 18 % 14 % Preferential imports 35 386 39 443 11 % 42 430 8 % 20 % Utilisation rate 47 % 55 % 17 % 50 % –9 % 6 % Utilisation rate (average) 53 % 58 % 8 % 58 % 1 % 9 % Agricultural products (total) 31 625 34 312 8 % 37 560 9 % 19 % Eligible imports 6 966 8 375 20 % 13 205 58 % 90 % Preferential imports 4 022 4 677 16 % 7 096 52 % 76 % Utilisation rate 58 % 56 % –3 % 54 % –4 % –7 % Utilisation rate (average) 54 % 52 % –3 % 53 % 3 % –1 % Textile products (total) 34 503 40 611 18 % 45 072 11 % 31 % Eligible imports 19 021 14 945 –21 % 19 131 28 % 1 % Preferential imports 7 795 7 354 –6 % 8 393 14 % 8 % Utilisation rate 41 % 49 % 20 % 44 % –10 % 7 % Utilisation rate (average) 46 % 53 % 15 % 54 % 1 % 17 % Industrial products (total) 341 332 444 766 30 % 525 672 18 % 54 % Eligible imports 49 016 48 731 –1 % 53 002 9 % 8 % Preferential imports 23 569 27 412 16 % 26 941 –2 % 14 % Utilisation rate 48 % 56 % 17 % 51 % –9 % 6 % Utilisation rate (average) 47 % 49 % 5 % 46 % –6 % –1 %

2.1.3. Graduation from the General Arrangement

The newly introduced graduation provisions clearly met the objective of the GSP graduation mechanism (15). Nine GSP beneficiary countries (out of 178) are graduated from the scheme for a specific product section or sections (16). The graduated countries are larger economies (17) which GSP preferential imports into the EU rang from 1,3 billion euros to more than 9,6 billion euros in 2006. Despite graduation, the level of imports into the EU of the graduated products originating in the abovementioned GSP beneficiaries has not been adversely affected. For the majority of cases total imports of these products with origin in the graduated countries increased in comparison to 2005 (the increases ranged from 3 % to 51 %) (see Annex III). The only exceptions were the sector of transport equipment from China and prepared foodstuffs from Brazil, where imports decreased respectively by 5 % and 8 %, (Tables 5 and 6).

Table 5

China S-XVII — Transport equipment

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 Total imports 1 988 3 566 79 % 3 400 –5 % 71 % Eligible imports 1 436 2 053 43 % Preferential imports 1 080 1 550 44 % Graduated Utilisation rate 75 % 76 % 0 %





Table 6

Brazil S-IV — Prepared foodstuffs

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 Total imports 3 815 278 3 725 793 –2 % 3 418 128 –8 % –10 % Eligible imports 138 2 –99 % Preferential imports 138 2 –99 % Graduated Utilisation rate 100 % 100 % 0 %

Furthermore 5 of the graduated countries have already diversified their GSP imports into the EU, as their GSP preferential imports increased between 2005 and 2006 (the increases ranged from 14 % to 45 %) (see Annex II.).

Therefore, as far as graduation is concerned it can be conclude that for 2006, the first year of implementation of the scheme, trade figures show that the main objectives of the gradation have been achieved. Indeed, exports of graduated countries have continue to grow in the sectors from which they graduated and more than half of the graduated countries have managed to diversify their GSP imports into the EU market.

2.2. The GSP+ special arrangement

2.2.1. The coverage of the GSP+ arrangement

For 2006, the GSP+ arrangement includes 6 454 tariff lines of which all but 21 benefit with 100 % preference. Compared with the general arrangement, the GSP+ scheme includes 75 additional tariff lines benefiting from a preferential treatment. The reference tariff lines applied to the GSP+ were already applied to the previous drug-regime. Furthermore, the GSP+ regime introduced 22 new tariff lines in the scheme and applied 100 % tariff preference to 188 new lines (171 from the agricultural sector, 20 from the industrial and 3 tariff lines were eliminated from the textile sector).

The Number of tariff lines described as ‘Not in GSP+’ reflects the difference between the total number of tariff lines benefiting from a preference under the GSP+ arrangement (6 454 for 2006) and the number of tariff lines under the MFN system which are dutable (7 280). The agricultural sector again comprises the highest number of tariff lines not yet liberalised, although lower in number than under the general arrangement (700).

Table 7

Coverage in terms of number of lines by sectors of the GSP+ arrangement

GSP+ 2006 GSP+ 2005 GSP+ 2005-2006 Sector No lines 0 <> 0 Not in GSP No lines 0 <> 0 Not in GSP No lines 0 <> 0 Not in GSP Agricultural 1 234 1 213 21 700 1 229 1 042 87 716 5 171 –66 –16 Textiles 1 169 1 169 0 7 1 172 1 172 0 7 –3 –3 0 0 Industrial 4 051 4 051 0 119 4 031 4 031 0 131 20 20 0 –12 Total 6 454 6 433 21 826 6 432 6 245 87 854 22 188 –66 –28

All in all, the GSP+ arrangement shows an improvement not only in the number of tariff lines (in relation to the drug regime) but above all in the number of tariff lines that benefit from 100 % preference.

2.2.2. The utilisation rate of the GSP+ arrangement

The utilisation rates of the GSP+ are substantially higher (over 70 %) than those under the general arrangement (just over 50 %). This is most likely due to the more attractive preferential margins available under the GSP+ regime. Moreover, this important difference between the utilisation rates of both arrangements could also be explained by the fact that the countries under the GSP+ arrangement do not benefit from any other preferential scheme in its trade relations with the EU.

A comparison of the utilisation rates of the GSP+ with the average utilisation rate for the whole scheme, allows concluding that the GSP+ regime has been performing well above the average, particularly for the agricultural sector and has in fact been the best performing of all three arrangements.

As far as the growth of the utilisation rates is concerned, the total utilisation rate has increased by 8 % during the three years under consideration, 1 % less than the average for the three arrangements. The textile sector is the one to have shown the highest growth which more than compensated the slight reduction in utilisation rate's growth for industrial and agricultural products.

The statistical analyses of GSP+ import figures confirm that GSP+ preferential imports increased by 15 % between 2005 and 2006. Additionally, preferential GSP+ imports into the EU from 12 out of 15 GSP+ beneficiary countries increased on average by 28,5 %, so that, 9 out of the 15 GSP+ countries moved upwards in the ranking of biggest GSP exporters to the EU (mostly Republic of Moldova 36 %, Nicaragua 30 % and Bolivia 47 %) (See Annex II).

Utilisation rates for the beneficiary countries of the GSP+ regime are available in Annex IV.

Table 8

Development of preferential imports as well as their share in eligible imports, i.e. the utilisation rate of preferences available for beneficiaries of the GSP+ arrangement

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 value value growth value growth growth All products Total imports 15 342 17 969 17 % 22 444 25 % 46 % Eligible imports 3 788 5 151 36 % 5 720 11 % 51 % Preferential imports 2 696 3 831 42 % 4 401 15 % 63 % Utilisation rate 71 % 74 % 4 % 77 % 4 % 8 % Utilisation rate (average) 53 % 58 % 8 % 58 % 1 % 9 % Agricultural products (total) 5 348 6 404 20 % 7 092 11 % 33 % Eligible imports 1 715 2 648 54 % 3 010 14 % 76 % Preferential imports 1 522 2 267 49 % 2 644 17 % 74 % Utilisation rate 89 % 86 % –3 % 88 % 2 % –1 % Utilisation rate (average) 54 % 52 % –3 % 53 % 3 % –1 % Textile products (total) 1 186 1 215 2 % 1 475 21 % 24 % Eligible imports 1 057 1 142 8 % 1 378 21 % 30 % Preferential imports 426 551 29 % 825 50 % 94 % Utilisation rate 40 % 48 % 20 % 60 % 25 % 50 % Utilisation rate (average) 46 % 53 % 15 % 54 % 1 % 17 % Industrial products (total) 8 807 10 349 18 % 10 877 5 % 24 % Eligible imports 1 015 1 360 34 % 1 332 –2 % 31 % Preferential imports 747 1 011 35 % 931 –8 % 25 % Utilisation rate 74 % 74 % 0 % 70 % –5 % –5 % Utilisation rate (average) 47 % 49 % 5 % 46 % –6 % –1 %

The main conclusion to be achieved is that preferential imports from all sectors but the industrial had a positive growth rate, and in fact, for the year 2006 grew faster than the eligible imports pushing up the already high utilisation rates.

2.2.3. Graduation from the GSP+ arrangement

No country graduated during the years of implementation of the arrangement.

2.3. The ‘Everything But Arms’ initiative

2.3.1. The coverage of the arrangement for the LDCs

For 2006, the EBA arrangement includes 7 216 tariff lines of which all benefit from 100 % preference. Compared with the GSP+ arrangement, it includes 762 additional tariff lines benefiting from a duty free treatment. This arrangement has experienced only a slight variation due to the disappearance of tariff lines from the Combined Nomenclature.

The number of tariff lines described as ‘Not in EBA’ reflect the difference between the total number of tariff lines benefiting from a preference under the EBA arrangement (7 216 for 2006) and the number of tariff lines under the MFN system that are dutable (7 280). In this scheme the not included exceptions are ‘arms’ and munitions (23 industrial tariff lines) and 41 agricultural product lines, mainly sugar and rice.

Table 9

Coverage in terms of number of lines by sectors of the arrangement for the LDCs

EBA 2006 EBA 2005 EBA 2006-2005 Sector No lines 0 <> 0 Not in EBA No lines 0 <> 0 Not in EBA No lines 0 <> 0 Not in EBA Agricultural 1 893 1 893 0 41 1 904 1 904 0 41 –11 11 0 0 Textiles 1 176 1 176 0 0 1 179 1 179 0 0 –3 –3 0 0 Industrial 4 147 4 147 0 23 4 138 4 138 0 24 9 9 0 –1 Total 7 216 7 216 0 64 7 221 7 221 0 65 –5 –5 0 –1

Therefore, the EBA arrangement is the most preferential of the three regimes of the GSP scheme both in terms of number of tariff lines to benefit from a preferential treatment and in the ‘amount’ of the preference applied since all products under this arrangement enter duty free quota free to the EU market.

2.3.2. The utilisation rate of the EBA arrangement

Utilisation rates under the EBA initiative are the lowest of GSP preferential arrangements (on average 44 %), indicating that there is still room for improvement. Indeed, a comparison of the utilisation rates of the arrangement for LDC's with the average utilisation rate for the whole scheme, allows concluding that the EBA regime has been performing below the average for the three years under consideration. The yearly utilisation rates for the textile sector are nevertheless well above the average, showing the good performance of this sector within the arrangement.

The new scheme seems, in any case, to have contributed to positive results, as the utilisation rates for 2006, shows the highest increase (9 %) if we compare it with the other two arrangements (see tables 4 and 8).

If we look at the overall use of EU preferences by LDCs; the LDC countries benefit from two preferential arrangements in the access to the EU market. One is the EBA arrangement established under the GSP and the second is the Cotonou agreement. The EBA is more advantageous, but for many products that the LDCs export to the EU the preferences are the same. As the LDCs have been granted substantial preferences under Cotonou's predecessors — the Lomé conventions — which date back to the mid 1970s and the EBA scheme was not introduced until 2001, the LDCs that are eligible for both schemes continue in many cases to use the Cotonou preferences. This may explain why the overall use of EU preferences by LDCs is 70 %, a figure which is significantly higher than if the utilisation rate of the EBA scheme alone is considered (48 %).

Table 10

Development of preferential imports as well as their share in eligible imports, i.e. the utilisation rate of preferences available for LDCs

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 value value growth value growth growth All products Total imports 14 037 16 451 17 % 17 126 4 % 22 % Eligible imports 7 400 7 570 2 % 9 274 23 % 25 % Preferential imports 3 138 3 303 5 % 4 449 35 % 42 % Utilisation rate 42 % 44 % 5 % 48 % 9 % 14 % Utilisation rate (average) 53 % 58 % 8 % 58 % 1 % 9 % Agricultural products (total) 2 129 2 478 16 % 2 503 1 % 18 % Eligible imports 1 389 1 574 13 % 1 653 5 % 19 % Preferential imports 194 224 15 % 290 29 % 49 % Utilisation rate 14 % 14 % 0 % 18 % 29 % 29 % Utilisation rate (average) 54 % 52 % –3 % 53 % 3 % –1 % Textile products (total) 5 321 4 913 –8 % 6 141 25 % 15 % Eligible imports 4 771 4 554 –5 % 5 771 27 % 21 % Preferential imports 2 719 2 833 4 % 3 816 35 % 40 % Utilisation rate 57 % 62 % 9 % 66 % 6 % 16 % Utilisation rate (average) 46 % 53 % 15 % 54 % 1 % 17 % Industrial products (total) 6 586 9 058 38 % 8 481 –6 % 29 % Eligible imports 1 239 1 441 16 % 1 849 28 % 49 % Preferential imports 225 245 9 % 341 39 % 52 % Utilisation rate 18 % 17 % –6 % 18 % 6 % 0 % Utilisation rate (average) 47 % 49 % 5 % 46 % –6 % –1 %

The main conclusion is that despite the still low utilisation rates, the EBA scheme shows the highest growth rates. Preferential imports in 2006 have grown faster than previous years allowing for higher utilisation rates. This is so particularly in the agricultural sector.

2.3.3. Graduation from the EBA arrangement

As the rules on graduation do not apply to the LDCs, no country benefiting from this special support arrangement graduated in any sector.

3. PREFERENTIAL MARGINS UNDER THE GSP

As it has been shown all along the report, the EBA arrangement is the most advantageous arrangement in terms of preferences provided to its beneficiaries. Correspondingly, the average preferential margin for this arrangement is the highest (8,37 %), closely followed by that of the GSP+ arrangement (8,36 %) and being the lowest the preferential margin for the general arrangement (3,21 %)

The major differences between the years 2005 and 2006 correspond, logically, to the agricultural sector which is the one most affected by the new scheme: 222 new tariff lines under the general arrangement (5 duty free 217 enjoying tariff reduction from the MFN tariff), only 5 new tariff lines under the GSP+ but increasing the number of tariff lines that enjoy duty free access to the EU (171).

The table below shows the average preferential margin for each of the arrangements and for the years 2005 to 2006, for the agricultural, textile and industrial sectors. Obviously, the EBA arrangement is the one to show the highest preferential margin followed closely by the GSP+ arrangement and finally, the general arrangement is the one to enjoy the lowest preferential margin.

Table 11

Average preferential margin (percentage points)

(%) Average preferential margin 2005 2006 GSP GSP+ EBA GSP GSP+ EBA Total 3,28 7,85 8,00 3,21 8,36 8,37 Agriculture 4,61 10,81 11,25 4,38 12,35 12,37 Textiles 1,67 8,34 8,34 1,67 8,33 8,33 Industrial 3,56 4,40 4,40 3,58 4,40 4,40

4. THE IMPACT ON THE COMMUNITY BUDGET

The impact on the Community budget is difficult to estimate. It is clear that without preferences some of those preferential exports would never take place. Even if some exports would still be sent to the EU market, the volume of trade will be lower as a result of the price increase due to the tariff. Therefore, one can not multiply the trade weighted preferential margin (18) with the volume of trade to obtain an estimate of what ‘loss’ in customs revenue is as a result of the trade preferences. Further on it is difficult to calculate the indirect costs for consumers and importers or intra-company trade in the EU.

Having said this, to provide an impression of the amounts, table 12 presents the volume of preferential imports under the general arrangement, the GSP+ and the EBA with the associated trade average preferential margins. Multiplying these two variables gives a figure which would correspond to the potential loss in customs revenue generated in case of all imports facing MFN duties. This figure amounts to about 2 billion euro which could be seen in relation to total EU customs revenue of about 14 billion euro in 2006 (19).

Table 12

Loss of income for the EU budget resulting from granting tariff preferences to imports under the general arrangement

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 value value growth value growth growth Preferential imports 34 821 37 521 8 % 42 276 13 % 21 % Average preferential margin 3,12 % 3,18 % 2 % 3,20 % 1 % 3 % Loss of income 1 086,4 1 193,2 10 % 1 352,8 13 % 25 %

Both parameters the preferential imports and the preferential margins have contributed in the increase of the growth rate of the loss of income for the Community budget have contributed.

Table 13

Loss of income for the EU budget resulting from granting tariff preferences to imports from beneficiary countries of the GSP+ regime

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 value value growth value growth growth Preferential imports 2 590 3 273 26 % 4 347 33 % 68 % Average preferential margin 6,09 % 6,31 % 4 % 7,22 % 14 % 19 % Loss of income 157,7 206,5 31 % 313,9 52 % 99 %

Both the volume of preferential imports and the preferential margin increased over the 3 years under consideration contributing to the growth of the loss of income. Although the smallest in absolute terms, the impact of the GSP+ regime on the EU budget is clearly growing faster than those of the other GSP arrangements.

Table 14

Loss of income for the EU budget resulting from granting tariff preferences to imports from LDCs

(Mio Euro, %) 2004 2005 2004-2005 2006 2005-2006 2004-2006 value value growth value growth growth Preferential imports 3 133 3 288 5 % 4 393 34 % 40 % Average preferential margin 7,32 % 6,99 % –5 % 6,99 % 0 % –5 % Loss of income 229,3 229,8 0,2 % 307,1 34 % 34 %

The growth of the loss in the Community budget is due mainly to the increase in preferential imports.

5. CONCLUSION

The present report has the objective to assess the performance of the three arrangements under the GSP scheme for developing countries.

As required by Article 28(3)3 of the EC Regulation (EC) No 980/2005, the Commission has, on the basis of a report, to examine the effects of the scheme covering all preferential arrangements and the period from 1st January 2006.

The main finding of this assessment is that the new regulation has introduced an improved scheme in terms of the number of products enjoying a preference and to which beneficiary countries have access to and the amount of preference to be benefited from.

Recent statistics show that the concept of the GSP introduced in 2006 works well in practice as the value of preferential imports for the general arrangement has increased by 8 % over the last year, despite the need for developing countries to adapt to the new needs of the scheme.

Furthermore, the GSP has proved to be efficient in promoting exports to the EU from countries that most need it, as GSP imports from LDC's and the GSP+ beneficiaries increased in 2006 by 35 % and 15 % respectively. Moreover, utilisation rates of these schemes have risen.

Additionally, the newly introduced graduation provisions clearly met the objective of the GSP graduation mechanism since the level of imports into the EU of the graduated products originating in the graduated countries has not been adversely affected.

However, there is still room for improvement since, particularly in the case of LDCs, the utilisation rates are still low, despite its good performance in terms of growth; for the general arrangement, utilization rates went down for all of the sectors during 2005-2006, but still documenting a 3 % growth from 2004-2006. This development has to be closely observed in coming years.

The overall analysis of the GSP for the past three years, and more particularly for 2006, provides, therefore, mixed results. Given that the new scheme has only been applied since 1st January 2006 and beneficiary countries might not have used the new instruments to their full extent, definitive conclusions cannot yet be drawn and further analysis in the coming years may still be required.

(1) Council Regulation (EC) No 980/2005 of 27 June 2005, applying a scheme of generalized preferences (OJ L 169, 30.6.2005).

(2) Communication of 7 July 2004 [COM(2004) 461, OJ C 242, 29.9.2004].

(3) Tariffs are suspended if preferential treatment results in (ad valorem) duties of 1 percent or less, or in specific duties of 2 EUR or less.

(4) This concerns mainly products in chapters 50-63 of the Combined Nomenclature.

(5) To be eligible, beneficiaries must meet a number of criteria in particular they must be vulnerable countries (see below) and atify and effectively apply key international conventions on core human and labour rights as well as environment and governance principles. Vulnerability is defined in the GSP regulation as meaning that the five largest sections of a beneficiary’s GSP-covered exports to the Community must represent more than 75 percent of its total GSP-covered exports. GSP-covered exports from that country must also represent less than 1 percent of total imports into the Community under GSP [include the Wold Bank criterion as well — see Article 9(3) GSP].

(6) Council Regulation (EC) No 416/2001 of 28 February 2001.

(7) However, the EBA scheme did not immediately liberalise imports of sugar, rice, and bananas. This concerned a total number of 43 tariff lines, for which EBA provides duty free quotas. These tariff lines were not included in the figure of 926.

(8) These countries are listed in Annex I.

(9) Exceptionally, the GSP+ incentive scheme was fast-tracked to enter into force on a provisional basis on 1st July 2005.

(10) Those countries which exports to the EU under the GSP surpass 1 billion euro and which are bigger economies: India, Brazil, Bangladesh, Thailand, Vietnam, Indonesia, Pakistan, Malaysia, Saudi Arabia, Ukraine, China, Argentina, Russia, South Africa.

(11) See Annex II.

(12) See Annex III.

(13) 0: Products that enjoy 100 % preference thus enter the EU Market Duty free.

(14) <> 0: Dutable products. Products which benefit from a reduction from the MFN tariff but do not enter the EU Market duty free.

(15) As foreseen in Communication of 7 July 2004, [COM(2004) 461, OJ C 242, 29.9.2004].

(16) Graduation criteria as foreseen in Art.14 of Council regulation (EC) No 980/2005.

(17) Brazil, China, Algeria, Indonesia, India, Malaysia, Russia, Thailand and South Africa.

(18) Trade weighted average preferential margin: average of preferential margins of a list of products weighted by import volume of each product.

(19) It should be remembered that Member States retain 25 % of the collected amount as collection costs thus the financial impact on the Community budget is only 75 % of the collected amounts. Thus total loss reflected in the budget would be of approximately 1,5 billion euro.

ANNEX I BENEFICIARY COUNTRIES UNDER ALL GSP ARRANGEMENTS 1. Beneficiary countries under the general agreement List of 42 GSP beneficiary countries Basis for statistical analysis as countries comprise > 90 % of all imports of countries under the general agreement 1. Algeria 2. Argentina 3. Armenia 4. Azerbaijan 5. Bahrein 6. Belarus 7. Brazil 8. Brunei Darussalam 9. Chile 10. China (People's Republic) 11. Cuba 12. Egypt 13. India 14. Indonesia 15. Iran (Islamic Republic of) 16. Jordan 17. Kazakhstan 18. Kuwait 19. Kyrgyzstan 20. Lebanon 21. Libyan (Jamahiriya Arab) 22. Malaysia 23. Mexico 24. Morocco 25. Oman 26. Pakistan 27. Paraguay 28. Philippines 29. Qatar 30. Russian Federation 31. Saudi Arabia 32. South Africa 33. Syrian (Arab Republic) 34. Tajikistan 35. Thailand 36. Tunisia 37. Turkmenistan 38. Ukraine 39. United Arab Emirates 40. Uruguay 41. Uzbekistan 42. Vietnam List of 71 beneficiary countries These countries are not included in the statistical analysis as these are either ACP beneficiaries, have no major implications for analysis or for lack of available export statistics 1. American Samoa 2. Anguilla 3. Antartica 4. Antigua and Barbuda 5. Aruba 6. Bahamas 7. Barbados 8. Belize 9. Bermuda 10. Botswana 11. Bouvet Island 12. British Indian Ocean Territory 13. British Virgin Islands 14. Cameroon 15. Cayman Islands 16. Christmas Islands 17. Cocos Islands (or Keeling Islands) 18. Congo 19. Cook Islands 20. Cote d’Ivoire 21. Dominica 22. Dominican Republic 23. Falkland Islands 24. Federal States of Micronesia 25. Fiji 26. French Southern Territories 27. French Polynesia 28. Gabon 29. Ghana 30. Gibraltar 31. Greenland 32. Grenada 33. Guam 34. Guyana 35. Heard Island & MacDonald Island 36. Iraq 37. Jamaica 38. Kenya 39. Macao 40. Marshall Islands 41. Mauritius 42. Mayotte 43. Montserrat 44. Namibia 45. Nauru 46. Netherlands Antilles 47. New Caledonia 48. Nigeria 49. Niue Island 50. Norfolk Island 51. Northern Mariana Islands 52. Palau 53. Papua New Guinea 54. Pitcairn 55. Seychelles 56. South Georgia and South Sandwich Islands 57. St Helena 58. St Kitts and Nevis 59. St Lucia 60. St Pierre and Miquelon 61. St Vincent & Northern Grenadines 62. Surinam 63. Swaziland 64. Tokelau Islands 65. Tonga 66. Trinidad & Tobago 67. Turks and Caicos Islands 68. US Minor Outlying Islands 69. Virgin Islands (USA) 70. Wallis and Futuna 71. Zimbabwe 2. Beneficiary countries under the GSP+ arrangement List of 15 countries 1. Bolivia 2. Colombia 3. El Salvador 4. Guatemala 5. Nicaragua 6. Republic of Moldova 7. Peru 8. Venezuela 9. Costa Rica 10. Ecuador 11. Georgia 12. Honduras 13. Mongolia 14. Panama 15. Sri Lanka 3. Beneficiary countries under the EBA arrangement List of 50 least developed countries under the EBA scheme 1. Afghanistan 2. Bangladesh 3. Bhutan 4. Burkina Faso 5. Cape Verde 6. Chad 7. Democratic Rep. of Congo (Zaire) 8. Equatorial Guinea 9. Ethiopia 10. Guinea 11. Haiti 12. Laos 13. Liberia 14. Malawi 15. Mali 16. Mozambique 17. Nepal 18. Rwanda 19. Sao Tome & Principe 20. Sierra Leone 21. Somalia 22. Tanzania 23. Tuvalu 24. Uganda 25. Yemen 26. Angola 27. Benin 28. Burundi 29. Cambodia 30. Central African Republic 31. Comoros 32. Djibouti 33. Eritrea 34. Gambia 35. Guinea-Bissau 36. Kiribati 37. Lesotho 38. Madagascar 39. Maldives 40. Mauritania 41. Myanmar 42. Niger 43. Samoa 44. Senegal 45. Soloman Islands 46. Sudan 47. Timor-Leste 48. Togo 49. Vanuatu 50. Zambia

ANNEX II VARIATION OF PREFERENTIAL IMPORTS OF THE GSP Beneficiary countries (in 1000 EUR) Countries Preferential imports 2005 Preferential imports 2006 Change in % 2006/2005 1. Angola 0,3 12 520,59 4 173 430 % 2. Bhutan 0,27 88,29 32 600 % 3. New Caledonia 0,57 57,51 9 989 % 4. Mozambique 172,26 8 242,05 4 685 % 5. Burundi 2,18 48,57 2 128 % 6. Burkina Fasso 167,26 2 677,42 1 501 % 7. Pakistan 170 052,84 2 298 079,86 1 251 % 8. Marshall (islands) 5,49 55,63 913 % 9. Gambia 27,4 270,74 888 % 10. Guam 3,58 34,65 868 % 11. Togo 245,02 2 292,87 836 % 12. Fiji (islands) 135,91 929,11 584 % 13. Palaos 5,24 34,89 566 % 14. Sierra Leone 579,06 3 029,35 423 % 15. Papua New Guinea 101,95 495,12 386 % 16. Malawi 2 258,42 10 485,85 364 % 17. Ethiopia 4 732,59 19 636,56 315 % 18. Libyan (Jamahiriya Arab) 123 405,72 465 527,61 277 % 19. Turkmenistan 16 633,10 61 367,20 269 % 20. Bahamas 742,2 2 457,63 231 % 21. Niger 28,24 87,85 211 % 22. Mali 46,61 134,79 189 % 23. Iraq 27,95 66,94 139 % 24. Jordan 1 721,86 4 107,53 139 % 25. Zambia 4 898,52 11 139,47 127 % 26. Chile 34 801,11 77 953,67 124 % 27. Ivory Coast 2 625,30 5 250,64 100 % 28. Benin 2 729,08 5 043,76 85 % 29. Kenya 3 891,55 7 025,01 81 % 30. Antigua and Barbuda 302,93 546,02 80 % 31. Tunisia 25 938,50 45 930,68 77 % 32. Afghanistan 901,07 1 567,00 74 % 33. Swaziland 237,72 407,46 71 % 34. Saudi Arabia 1 210 864,13 2 011 219,21 66 % 35. The Netherlands Antilles 12 248,52 20 023,19 63 % 36. Mexico 41 243,23 63 958,56 55 % 37. Macao 11 268,06 17 404,28 54 % 38. Sri Lanka 618 999,91 937 521,93 51 % 39. Bolivia 17 110,77 25 121,24 47 % 40. Belize 199,39 290,97 46 % 41. Malaysia 1 451 797,42 2 102 764,01 45 % 42. Namibia 8 393,81 12 096,34 44 % 43. Panama 67 278,95 95 478,33 42 % 44. Argentina 1 086 668,99 1 536 933,70 41 % 45. The Maldives 31 382,61 44 322,75 41 % 46. Saint-Vincent-et the Grendaian 23,99 33,09 38 % 47. Gabon 367,98 506,65 38 % 48. The Congo (Democratic Republic of) 2 030,73 2 787,35 37 % 49. Yemen 63 465,46 86 486,20 36 % 50. Moldova (Republic of) 136 485,59 185 720,36 36 % 51. Bangladesh 2 648 038,85 3 566 426,65 35 % 52. Cambodia 355 495,18 474 710,41 34 % 53. Paraguay 14 323,88 18 995,08 33 % 54. Nicaragua 21 873,20 28 411,13 30 % 55. Nigeria 34 172,30 43 948,84 29 % 56. Brazil 3 567 498,58 4 522 398,81 27 % 57. Uruguay 137 316,34 172 828,18 26 % 58. Sudan 843,32 1 057,31 25 % 59. Oman 52 403,93 64 124,96 22 % 60. Honduras 78 080,81 95 500,05 22 % 61. Peru 533 685,11 646 110,45 21 % 62. Mongolia 9 810,15 11 856,92 21 % 63. Surinam 119,96 144,6 21 % 64. Ukraine 1 442 052,99 1 732 475,09 20 % 65. El Salvador 54 114,69 64 743,39 20 % 66. Ghana 2 167,20 2 589,64 19 % 67. Bélarus 409 388,61 488 192,28 19 % 68. Thailand 2 612 381,60 3 107 573,63 19 % 69. Senegal 8 117,30 9 610,54 18 % 70. Indonesia 2 436 304,90 2 881 934,82 18 % 71. Costa Rica 344 728,44 407 138,63 18 % 72. Egypt 167 456,03 197 659,46 18 % 73. Guatemala 114 404,22 134 398,64 17 % 74. Vietnam 2 565 978,80 3 009 954,18 17 % 75. Kazakhstan 422 503,55 494 225,98 17 % 76. Ecuador 662 100,64 769 661,87 16 % 77. Uzbekistan 55 534,74 64 290,05 16 % 78. The Philippines 682 938,84 786 985,02 15 % 79. St. Kitts and Nevis 26,68 30,7 15 % 80. India 8 478 128,71 9 668 342,69 14 % 81. Madagascar 5 521,49 6 292,16 14 % 82. Lao (People's Democratic Republic) 91 352,03 101 760,93 11 % 83. Kyrgyzstan 2 762,21 3 064,12 11 % 84. Iran (Islamic Republic of) 407 182,19 445 766,20 9 % 85. Dominican (Republic) 3 651,40 3 990,22 9 % 86. Morocco 51 152,54 55 875,92 9 % 87. Haiti 1 485,20 1 579,61 6 % 88. Syrian (Arab Republic) 11 271,35 11 801,13 5 % 89. Mauritania 765,57 777,55 2 % 90. Colombia 488 313,43 485 722,67 –1 % 91. Nepal 68 953,44 68 456,60 –1 % 92. Cuba 146 227,27 143 095,21 –2 % 93. Grenada 1,02 0,99 –3 % 94. Trinidad and Tobago 25 633,98 24 668,19 –4 % 95. Mauritius 2 617,88 2 296,91 –12 % 96. Rwanda 82,67 72,41 –12 % 97. Kuwait 559 105,96 480 386,06 –14 % 98. Georgia 95 572,82 77 013,15 –19 % 99. Uganda 2 441,33 1 960,88 –20 % 100. Qatar 146 884,96 109 966,20 –25 % 101. Lebanon 3 573,88 2 661,20 –26 % 102. Venezuela 588 737,86 437 589,70 –26 % 103. Bahrein 241 767,44 178 320,93 –26 % 104. Lesotho 846,01 614,54 –27 % 105. Cameroon 289,01 209,28 –28 % 106. Djibouti 375,7 260,8 –31 % 107. Armenia 181 895,48 122 567,40 –33 % 108. Azerbaijan 49 252,78 32 064,04 –35 % 109. Turks et Caïques (islands) 1,83 1,19 –35 % 110. Russia (Federation of) 2 156 654,47 1 391 302,62 –35 % 111. South Africa 2 066 749,65 1 316 357,93 –36 % 112. Brunéi Darussalam 426,13 264,14 –38 % 113. Tajikistan 30 495,05 18 374,15 –40 % 114. Tanzania (Republic of) 4 807,89 2 840,91 –41 % 115. Jamaica 350,95 198,42 –43 % 116. United Arab Emirates 1 294 710,98 615 157,93 –52 % 117. Chad 53,34 22,03 –59 % 118. Saint-Pierre-et-Miquelon 61,64 23,91 –61 % 119. Tokelau (Islands) 146,88 54,71 –63 % 120. Virgin British (Islands) 251,76 93,03 –63 % 121. British territory of the Indian Ocean 26,77 9,77 –64 % 122. China (People's Republic of) 4 839 500,88 1 618 369,40 –67 % 123. Liberia 162,32 49,72 –69 % 124. Comoros Islands (Islands) 77,68 22,9 –71 % 125. Zimbabwe 5 934,59 1 415,38 –76 % 126. Algeria 47 128,13 7 783,33 –83 % 127. French Polynesia 186,41 26,83 –86 % 128. Aruba 47 050,34 5 479,56 –88 % 129. Dominica 93,86 9,75 –90 % 130. Barbados 35,99 3,62 –90 % 131. Guyana 198,41 17,29 –91 % 132. The Solomon Islands 306,88 14,17 –95 % 133. Eritrea 52,26 0,55 –99 % 134. Virgin of the United States (Islands) 39 918,41 194,33 – 100 % 135. Gibraltar 8 496,70 0,73 – 100 % 136. Anguilla 7,87 0 – 100 % 137. Botswana 164,25 0 – 100 % 138. Bouvet (Island) 51,73 0 – 100 % 139. Cocos (Islands) (or Keeling Islands) 19,72 0 – 100 % 140. Cook (Islands) 13,15 0 – 100 % 141. Guinea 46,24 0 – 100 % 142. Mariannes of the North (Islands) 1,73 0 – 100 % 143. Mayotte 0,97 0 – 100 % 144. Nauru 10,75 0 – 100 % 145. Niue (Island) 7,87 0 – 100 % 146. Norfolk (Island) 0,51 0 – 100 % 147. Pitcairn 0,12 0 – 100 % 148. Seychelles 2 195,89 0 – 100 % 149. South Georgia and the Sandwich Southern Islands 2 375,47 0 – 100 % 150. The Congo 281,49 0 – 100 % 151. Vanuatu 61,72 0 – 100 % 152. Walles and Futuna 3,1 0 – 100 % 153. Saint Helena 0 0,97 154. Caïmanes (Islands) 0 1,39 155. Montserrat 0 2,02 156. Somalia 0 2,06 157. Timor-Leste 0 10,92 158. Sao Tome and Principle 0 14,65 159. Micronesia (Federate States of) 0 16,29 160. Cape Verde (Republic of) 0 23,75 161. American Samoa 0 62,59 162. Equatorial Guinea 0 1 566,49

ANNEX III COUNTRIES/SECTORS GRADUATED FROM THE GENERAL ARRANGEMENT (in 1000 EUR) INDONESIA S-3 Animal or vegetable fats, oils and waxes 611 725 S-9 Wood 341 357 Total imports 6 662 027 953 082 14,3 % MALAYSIA S-3 Animal or vegetable fats, oils and waxes 539 736 Total imports 5 289 934 539 736 10,2 % BRAZIL S-4 Prepared foodstuffs, brevages, spirits, vinegar 1 213 297 S-9 Wood 332 648 Total imports 5 645 233 1 545 945 27,4 % ALGERIA S-5 Mineral Products 1 073 116 Total imports 1 291 750 1 073 116 83,1 % CHINA S-6 Products of the chemical industries 2 157 039 S-7 Plastics and rubber 3 101 833 S-8 Raw hides, skins and leather 3 730 823 S-9 Wood 322 255 S-10 Pulp of wood and paper 535 877 S-11 Textiles 12,5 % 11 632 933 S-12 Footwear etc. 3 409 209 S-13 Stones, glass and ceramic products 1 062 408 S-14 Pearls and precious metals 602 946 S-15 Base metals 4 146 914 S-16 Machinery and mechanical appliances 15 148 264 S-17 Transport equipment 987 986 S-18 Optical and musical instruments, clocks and watches 3 346 338 S-20 Miscellaneous 9 649 497 Total imports 60 977 956 59 834 321 98,1 % INDIA S-14 Pearls and precious metals 275 970 S-11 Textiles 12,5 % 4 141 454 Total imports 9 916 656 4 417 424 44,5 % THAILAND S-14 Pearls and precious metals 476 916 S-17 Transport equipment 1 060 654 Total imports 7 113 130 1 537 570 21,6 % RUSSIA S-15 Base metals 1 937 467 S-6 Products of the chemical industries 1 310 066 S-10 Pulp of wood and paper 230 913 Total imports 5 921 440 3 478 446 58,7 % SOUTH AFRICA S-17 Transport Equipment 916 899 Total imports 5 237 945 916 899 17,5 %