12. 12. 88 Official Journal of the European Communities No C 318/21 
Opinion on the proposal for a Council Regulation applying generalized tariff preferences for 
1989 
(88/C 318/09) 
On 31 May 1988, the Economic and Social Committee decided, in accordance with Article 
20 (4) of its rules of procedure, to draw up an Opinion on the abovementioned proposal. 
The section for external relations, trade and development policy, which was responsible for 
preparing the Committee's work on the subject, adopted its Opinion on 16 September 1988. 
The rapporteur was Mr Gavazzutti. 
At its 258th plenary session (meeting of 29 September 1988) the Economic and Social 
Committee adopted the following Opinion by a majority in favour, with three votes against. 
1. The Committee reiterates its full support for the 
scheme, which helps promote balanced growth in devel­
oping countries. 
2. It is imperative that the generalized system of 
preferences (GSP), or any other form of aid to develop­
ing countries, and all bilateral or multilateral EEC 
agreements, adhere to rules of the General Agreement 
on Tariffs and Trade (GATT) and reflect the position 
taken by the EEC delegation at the current Uruguay 
round talks in Geneva. 
3. A coherent and comprehensive system of Com­
munity aid to development, of which the GSP would 
have to be an integral part, should be geared primarily 
to: 
— the poorest developing countries, 
—- developing countries whose economies have reached 
take-off, i.e. countries which, with a regular flow 
of aid for industrial and agricultural development 
and a new international division of labour, could 
rapidly acquire majority status and become full 
members of the international trading community 
governed by GATT. 
4. The introduction of differentiated criteria in the 
application of the GSP, and in particular the exclusion 
of some products and countries, is a first, positive step 
in this direction, although it falls short of the dual 
objective outlined above. 
5. Aid schemes should therefore be concentrated, to 
guarantee effectiveness; dependable; transparent; objec­
tive, i.e. based on up-to-date and reliable data; simple 
to understand and apply. 
6. Despite the fact that its shortcomings are becom­
ing increasingly apparent (the Commission admits as 
much in the explanatory memorandum), the present GSP is unlikely to be replaced before 1990, inter alia 
because the latest round of GATT talks in Geneva will 
probably result in further tariff reductions. 
7. The current aim is to revamp (or replace) the 
present scheme when it expires in 1990, in the light of 
the completion of the internal market by 1992. 
8. It is hoped that the review will be carried out as 
soon as possible and that the Committee will be invited 
to take part in the preparatory work. 
9. Turning to the more detailed aspects of the present 
scheme, the Committee notes that the application of 
differentiated country/product criteria has failed to 
exclude certain very competitive countries which are 
more highly developed overall than some EEC countries 
and regions. 
10. Other criteria should therefore be introduced to 
determine whether to exclude a country from the GSP, 
e.g. higher per capita GDP than an EEC Member State, 
possibly combined with other general considerations, 
such as a constant surplus on external accounts. 
11. In any event, the proposed transfer of products 
with reference numbers 10.0500, 10.0810, 10.0830, 
10.0870, 10.0920, 10.1030, 10.1200, 10.1260 and 
10.1268 (*) to the list of non-sensitive products is unac­
ceptable because it affects ailing sectors of Community 
industry. In addition, product no. 4410 (fibreboard) 
should be transferred from the list of non-sensitive to 
sensitive products, in anticipation of the application of 
the steps requested in point 14 below. 
(') 1. 10.0500 New pneumatic tyres and inner tubes; 2. 10.0810 
Iron or steel bars; 3. 10.0830 Flat-rolled products of iron or 
non-alloy steel (2%); 4. 10.0870 Iron cables, cords; 
5. 10.0920 Copper bars; 6. 10.1030 Electric motors and gen­
erators (2%); 7. 10.1200 Watch cases; 8. 10.1260 Other fur­
niture; 9. 10.1268 Prefabricated buildings of wood. 
No C 318/22 Official Journal of the European Communities 12. 12. 88 
12. The Committee agrees that the reference base 
for re-establishing customs duties on given industrial 
products could be raised from 5 % to 6 % of the total 
value of Community imports of the relevant product in 
1987. The Committee is however opposed to doubling 
the reference base from 1 % to 2 % for products of 
ailing sectors which are an exception to the rule. 
13. The Committee is wary of allowing the currenc­
ies of many countries to fluctuate against the ECU. 
This could lead to sudden, uncontrolled influxes of 
zero-rated imports. In some cases (chemical, iron and 
steel and other ailing sectors) it might be better to 
limit the quantity, rather than the value, of products 
imported under the GSP. Whilst it appreciates the diffi­
culties and implications involved, the Committee feels 
that every possible means of achieving this should be 
explored, perhaps on a limited trial basis to start with. 
14. The Committee believes that dumping, particu­
larly of chemical products, is widespread, and reiterates 
the need for prompter verification. Once the official 
verification procedure has been initiated, eligibility for 
GSP treatment should automatically and immediately 
be withdrawn from the product/country in question, 
as has been advocated in the past. 
15. Normal GATT tariffs should be automatically 
reintroduced for imports in excess of tariff ceilings and/ 
or quotas, to prevent any ambiguities or misunderstand­
ings from arising. 
16. The Committee is regrettably forced to conclude 
that exclusion from the GSP is the only possible course 
of action in the case of South Korea, in view of its 
discrimination in the field of intellectual property. The 
fact that this dispute cannot be settled within the GATT 
Done at Brussels, 29 September 1988. is both surprising and disappointing; the Committee 
would urge the Commission to raise the matter during 
the current round of GATT talks so that this serious 
irregularity can be dealt with. 
17. The Committee would renew its call that the 
Community, when establishing economic ties with 
developing countries, actively promote social progress 
by requiring the countries in question to respect funda­
mental human rights and the basic social rights 
enshrined in the main conventions of the International 
Labour Organization (ILO). Instead of continuing to 
offer GSP facilities to countries which systematically 
oppose any social or civic progress, or which are 
involved in protracted wars, it might make more sense 
to suspend the GSP, in line with actions taken by other 
countries. 
18. The Committee supports the Commission's aim 
of gradually switching to the Community quota system 
for all products, but feels that this can only be 
accomplished by computerizing and standardizing to a 
large degree the internal and external mechanisms of 
customs services. 
19. A quota system could result in the Community 
being inundated by imports (in terms of time, space and 
category of product), ultimately triggering commercial 
practices designed to make use of every available means 
to keep competing products out of the market. Arrange­
ments should be made for preventive measures to be 
included in GSP rules, e.g. an immediate freeze on 
imports, followed by a reduction in quotas. 
20. Finally, firm action should be taken against 
countries pursuing aggressive export policies as these 
are detrimental to other developing countries' pro­
duction and exports. This could culminate in the with­
drawal of GSP treatment, as such practices are 
accompanied by dumping and, without exception, by 
unacceptable labour and wage policies. 
The Chairman 
of the Economic and Social Committee 
Alfons MARGOT