Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) applying a multiannual scheme of generalized tariff preferences for the period 1 January 1999 to 31 December 2001` (1999/C 40/09)

On 2 December 1998 the Economic and Social Committee, acting in pursuance of Rule 23(3) of its Rules of Procedure, decided to draw up an opinion on the above-mentioned proposal.

The Section for External Relations, which was instructed to drawn up the section's opinion on the matter, adopted its opinion on 17 November 1998. The rapporteur was Mr Giesecke.

The Committee adopted the opinion set out below at its 359th plenary session (meeting of 2 December 1998) by a unanimous vote.

1. Introduction

1.1. Over the last few decades, the EU has constantly improved and adjusted its policy on trade preferences for developing countries in the light of recent developments; the EU has, however, taken care not to leave its own sensitive economic sectors unprotected. The EU has sought to take account more effectively of the differing needs of the various groups of developing countries, whilst, however, also paying greater heed to the interests of EU importers.

1.2. The latest major revision of the GSP came into force in 1995, marked by the beginning of a new ten-year period of EU tariff arrangements. This revision brought further progress on transparency and predictability, for governments in developing countries and also importers who wish to focus on transparent markets.

1.3. A new development was the provision whereby good conduct on the part of individual developing countries in the fields of labour law, protection of the environment and anti-drug measures could be specially rewarded; another new provision was the graduation mechanism under which advanced developing countries gradually ceased to benefit from preferences.

1.4. A number of additional improvements and adjustments are now being proposed three years into the new period covered by the Community offer.

2. Commission proposals

2.1. With a view to facilitating the application of the GSP the widely differing provisions for industrial and agricultural products are to be brought together in the proposed new regulation and to remain in force until 31 December 2001.

2.2. In the light of current developments in Asia, the Commission proposes that the updating of the basic data determining graduation - which is now due to take place - should be postponed.

2.3. The special incentives made available to the Andean and central American countries to promote anti-drugs measures are regarded as still being necessary; the Commission proposes that these measures be continued, subject to a number of additional conditions. In the industrial products sector, the scope of these special incentives is to be extended to include the countries of the Central American Common Market and Panama. A new provision is, however, proposed whereby if the countries concerned are to benefit from a higher level of special incentives over and above the normal level, they must respect labour and environmental standards.

2.4. A number of forestry by-products are to be added to the list of wood products from tropical forests covered by the environmental clause.

2.5. The Commission also confirms its pledge to bring about duty-free access for virtually all goods originating in least developed countries by 2005, in line with the provisions applying to the ACP states.

3. Observations by the ESC

3.1. The Committee welcomes the fact that the EU is presenting its offer at this critical juncture for the world economy. An increasing number of developing countries and transition countries - indeed whole regions - are experiencing economic crises which in some cases may well destabilize their democratic systems. Against this background the political importance of EU trade policy, with its promise of continuity and dependability, is way beyond its importance in commercial terms.

3.2. The Committee recognizes the efforts made by the Commission to ensure ongoing development of the existing GSP. The latest example of the Commission's efforts in this respect is the offer to grant additional rates of preference provided that the beneficiary states observe internationally recognized core labour and environmental standards and, in the case of a number of states, introduce anti-drug measures.

3.3. The Committee also acknowledges the efforts made by the Commission to streamline the complicated administrative procedures involved. In this context the Committee expressly welcomes the consolidation of all the various provisions in a single regulation.

3.4. The Committee welcomes the Commission's proposal - in the light of economic developments in a number of developing and transition-countries - to postpone updating the basic data used in the graduation mechanism. Failure to do this would mean that some countries would be likely to be discriminated against in a manner which is not justified by the current situation. The Committee eagerly awaits the report announced by the Commission.

3.5. In this context the Committee calls upon the Commission to examine the existing de minimis provision [Article 30(2)] with a view to considering the case for increasing the values concerned. An increase would send out the right message at the right moment in time.

3.6. The Committee also proposes that the Commission include in the GSP all the core labour standards included in the ILO Declaration of Fundamental Principles and Rights at work, requiring that Article 12 be amended to include Conventions 100 and 111.

3.7. The Committee again deplores the fact that a number of EU Member States have yet to ratify some of these conventions, in particular Convention No 138.

3.8. The Committee has repeatedly pointed out that the provisions have to be transparent and predictable if the GSP is to meet with broad acceptance amongst the beneficiary states and EU importers, to be effective (). The Committee would therefore be very pleased to see the Commission attach still greater importance to this aspect in future.

3.9. The Committee expressly welcomes the Commission's pledge to bring about, by the year 2005, duty-free access for practically all industrial products from the least developed countries and to simplify the origin rules and provisions on cumulation which apply to their export. If possible this process should, however, be concluded at an earlier date.

3.10. The Committee supports the Commission's view that the principle of ensuring that the measures have an overall neutral effect should continue to be regarded as one of the key objectives of the GSP.

3.11. The Committee is, however, unable to make an objective assessment of the effectiveness of earlier amendments to the GSP, particularly as regards global neutrality, as the necessary data is not available. The Committee therefore asks the Commission to provide a report on trends in imports under the GSP, broken down by value and supplier country.

3.12. Should there be a lack of administrative cooperation on the part of authorities in the beneficiary countries, the Commission proposes to introduce procedures, administered by the Commission, whereby defaulting states would be excluded from the preferential arrangements for a period of three or six months. The Committee has reservations over a transfer of further powers to the Commission, but these reservations are outweighed by the more rapid decision-making processes. There is, however, in the Committee's view, an urgent need for appropriate machinery to protect the vital interests of the importers concerned. The Committee therefore recommends drawing attention in the Official Journal of the European Communities, at an early juncture, to any doubts which may arise as regards the proper application of preference rules to individual states. Agreements concluded before the publication of such information should, of course, be unaffected by any action which may be taken.

Brussels, 2 December 1998.

The President of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

() OJ C 73, 9.3.1998, p. 98.