Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) applying Article 6 of Council Regulations (EC) Nos 3281/94 and 1256/96 on multiannual generalized tariff preferences schemes in respect of certain industrial and agricultural products originating in developing countries, excluding the most advanced beneficiary countries from entitlement to generalized tariff preferences` (98/C 73/16)

On 14 November 1997, the Council consulted the Economic and Social Committee, in pursuance of Article 198 of the EC Treaty, on the above-mentioned proposal.

The Section for External Relations, Trade and Development Policy, which was instructed to prepare the Committee's work on this subject, adopted its opinion, by a unanimous vote, on 25 November 1997. The rapporteur working without a study group was Mr Giesecke.

At its 350th plenary session held on 10 and 11 December 1997 (meeting of 10 December) the Committee adopted the opinion set out below, with 119 votes in favour and 6 abstentions.

1. Introduction

1.1. The generalized tariff preferences scheme (GSP) was radically revised in respect of the 1994-1997 period (). A key aim of the new multiannual scheme was to secure a decisive improvement in the transparency and predictability of the GSP vis-à-vis the earlier quota- and ceiling-based provisions. Transparency and predictability are important to both suppliers and administrations in the poorer developing countries which seek to focus their export drives on transparent markets. These factors are also in the interests of importers in the EU Member States who must have adequate incentives to establish new and stable sources of supply.

1.2. A new possibility has been introduced whereby GSP benefits for developing countries can be tapered off once they have attained a higher level of GNP and exporting capacity. The overall volume of imports subject to preferential regimes should however be maintained, in accordance with the principle of 'global neutrality`; i.e. the poorer developing countries should benefit from savings in this respect.

1.3. Provision has also been made for special trade incentives - which have in the meantime been drawn up - to promote good practice by individual developing countries in respect of social provisions and environmental protection.

2. Commission proposal

2.1. The Commission proposes () that South Korea, Singapore and Hong Kong be withdrawn, on the basis of objective and clearly-defined prosperity criteria, from the list of countries benefiting from the GSP.

2.2. In the Financial Statement set out at the end of the draft Regulation, the expected customs gains in 1997 are estimated at ECU 40,3 million; this amount should in future be made available to the poorer developing countries.

2.3. Exclusion of the three countries from the GSP will not entail losing the benefits of the regional cumulation mechanism relating to the origin of products.

2.4. The new system of incentives to promote particularly good practice as regards social provisions and environmental protection comes into force on 1 January 1998.

3. Comments by the ESC

3.1. In its opinion of 20 October 1994 () the ESC broadly welcomed the fundamental review of the GSP. The ESC strongly urged that the overall procedures be considerably simplified. It took the view that such a step would be just as much in the interest of the poorer developing countries as of EU importers.

3.2. In view of the fact that the ESC had also called for priority to assisting particularly poor developing countries, it welcomes the exclusion of the three countries in question. A number of particularly competitive categories of products were excluded from the GSP since 1996 (see Appendix).

3.3. The ESC draws attention to the absence of transitional provisions under Article 20 of Council Regulation (EC) No 3281/94 in respect of 'goods afloat`.

3.4. The ESC also welcomes the application of the principle of neutrality as provided for in the financial statement. The ESC urges that the volume of aid released in this way should be allocated to poorer developing countries as soon as possible.

3.5. The ESC also welcomes the Commission proposal that the regional cumulation mechanism in respect of the origin of products should not be affected by the removal of states from the GSP; Singapore in particular, participates in this mechanism within the framework of ASEAN. The Commission's proposal in this respect will mean that industrial cooperation between these states is not disrupted. A number of derogations to the rules governing the origin of products which have come into force recently in respect of some developing countries in southern and south-east Asia have already somewhat impaired the transparency of the system as a whole.

3.6. The ESC has already welcomed the special arrangements to promote particularly positive action in respect of social provisions and environmental protection, but it has also drawn attention to the problems which could arise in this context (). The ESC reiterates its view that this promising idea will only be effective if it does not make the whole system less transparent and predictable, which could very easily happen.

3.7. The ESC has noted with interest that the revised GSP has brought about higher levels of transparency and predictability, with a beneficial impact both as regards exporters and administrations in the developing countries and as regards EU importers. The ESC is concerned that the transparency and predictability of the whole scheme could be jeopardized and it asks the Commission to consider these aspects very carefully, when deciding on the matter; it also urges the Commission to monitor the impact of these measures and to include the ESC amongst the recipients of its annual reports.

Brussels, 10 December 1997.

The President of the Economic and Social Committee

Tom JENKINS

() Cf: Proposal for a Council Regulation (EC) applying a three-year scheme of generalized tariff preferences (1995-1997) in respect of certain industrial products originating in developing countries and the Proposal for a Council Regulation (EC) extending into 1995 the application of Regulations (EEC) No 3833/90, (EC) No 3835/90 and No 3900/91 applying generalized tariff preferences in respect of certain agricultural products originating in developing countries. COM(94) 337 final.

() COM(97) 533 final.

() OJ C 397, 31.12.1994.

() See point 9 of the opinion of 20.10.1994, OJ C 397, 31.12.1994.

APPENDIX to the opinion of the Economic and Social Committee

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