No C 298/46 Official Journal of the European Communities 27. 11. 89 
Opinion on the proposal from the Commission to the Council fixing the Community's 
generalized tariff preferences scheme for 1990 (!) 
(89/C 298/12) 
On 9 June 1989 the Council of the European Communities decided to consult the Economic 
and Social Committee, on a voluntary basis, 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 15 September 
1989. The rapporteur was Mr Cavazzuti. 
At its 269th plenary session (meeting of 27 September 1989) the Economic and Social 
Committee unanimously adopted the following Opinion. 
1. The Committee has examined the Commission's 
proposals concerning the application of generalized tar­
iff preferences for 1990 and broadly agrees with them, 
though it would make the following comments and 
Recommendations. 
2. The Committee appreciates that, as 1990 is the 
last year in which the 1981-1990 scheme is applicable, 
significant amendments are out of the question. The 
Committee would nevertheless like to make certain 
Recommendations, partly because otherwise it may give 
the impression that it has had second thoughts about 
the suggestions it has put forward in the past, and 
partly because it hopes that even a brief reminder of 
these suggestions could at last prompt some response 
and at any rate lead to their incorporation into the 
Commission's forthcoming proposal on the 1991-2000 
generalized system of preferences (GSP) scheme. 
3. The Committee reiterates its support for the GSP 
as an effective instrument designed, in conjunction with 
other measures, to promote development in less 
developed countries (LDC). 
4. However, the Committee is forced to note that 
there are serious doubts as to the effectiveness of the 
present system and fears that a successful outcome to 
the Uruguay Round—which has the Committee's full 
backing—could further weaken the impact of the GSP 
on development in LDC. 
5. As a corollary, the Committee would call for bold 
changes in the new scheme: a concentrated and selective 
approach is indispensible if the GSP is to produce 
benefits commensurate with its cost and its negative 
effects on the least-developed areas in the Community. 
The Committee also reiterates that the GSP must be 
simple, clear and precise. 
6. In the Committee's view, all LDC should be able 
to benefit under the GSP. It would particularly stress 
(!) OJ No C 165, 3. 7. 1989, p. 1. its own preference for a consistent approach, consisting 
of separating (a) the poorest countries and (b) those 
which are on the threshold of take-off, so as to be 
able to concentrate—solely on these two groups of 
countries—substantial efforts providing significantly 
more assistance than is available under the GSP alone. 
7. In this respect, the Committee would emphatically 
renew its Recommendation that countries whose per 
capita GDP is higher than that of a Community country 
or with a consistent balance of payments surplus should 
immediately be excluded from the GSP. It notes that it 
is impossible to quantify advantages and disadvantages 
or to pinpoint all the potential beneficiaries under the 
revised scheme. 
8. There are problems involved in separating off 
and identifying the poorest countries with a view to 
providing them with more substantial and effective aid. 
The Committee realizes that more than just a formal 
response is called for but is convinced that this is the 
right approach and therefore asks the Commission to 
find the most appropriate legal forms for demarcation 
of this new area. 
9. The Committee once again endorses the system 
of exclusions based on country/product assessments 
but feels that, if the system is to be workable and 
watertight, it might be necessary to tackle the problem 
of defining newly industrializing countries (NIC) on the 
basis of specific criteria. 
10. The Committee takes note of the Court of Justice 
judgment concerning the obligation to abolish national 
quotas and to fix and use a Community quota, on a 
product-by-product basis, to be binding on all Member 
States. As stated in its Opinion on the GSP for 1989, 
the Committee would have preferred to achieve this 
objective in stages up until 1992, to avoid it having too 
drastic an impact on the Community's most vulnerable 
27. 11. 89 Official Journal of the European Communities No C 298/47 
sectors and regions. As this is not possible, the Com­
mittee feels it might be appropriate to introduce a clause 
allowing intervention in the case of largescale use of 
the GSP (for a particular region of the Community, a 
given category of product and/or over a short period 
of time) because of the potentially serious consequences, 
particularly for the Community's economically weaker 
regions. 
11. The Committee regrets that the Commission has 
failed to heed the Recommendation made by the ESC 
last year that certain products should not be transferred 
from the sensitive list to the non-sensitive list (reference 
nos 10.0810,10.0830,10.0870,10.1030,10.1200,10.1260 
and 10.1268). It is pleased to note that products 10.0500 
and 10.0920 have been retained on the sensitive list(1). 
12. The Committee has nothing to add to its pre­
vious comments and suggestions on these proposals 
(particularly regarding cigars, figs and frozen straw­
berries). However, the Committee would reiterate its 
hope that the GSP will act as an incentive for local 
first-stage processing of raw materials (especially agri­
cultural products—such as coffee) in these countries 
since first-stage processing does not necessitate large-
scale investment or sophisticated technologies. 
13. An overall assessment of the situation is imposs­
ible without data on the extent to which the scheme 
was used in 1988 (a highly significant year in that it also 
saw the introduction of new administrative criteria), 
particularly in the case of the multifibre arrangement 
(MFA) sector which, in the Commission's Opinion, 
recorded a 'significant increase'. The Committee hopes 
that the necessary data will be provided as soon as 
possible so that it can obtain a clear idea of the situ­
ation. 
(!) 1. 10.0810 Iron or steel bars; 2. 10.0830 Flat-rolled products 
of iron or non-alloy steel (2%); 3. 10.0870 Iron cables, cords; 
4. 10.1030 Electric motors and generators (2%); 5. 10.1200 
Watch cases; 6. 10.1260 Other furniture; 7. 10.1268 Prefabri­
cated buildings of wood; 8. 10.0500 New pneumatic tyres and 
inner tubes; 9. 10.0920 Copper bars. 
Done at Brussels, 27 September 1989. 14. Turning to agricultural products, the Committee 
would draw attention to the implications of the current 
GATT talks in Geneva for the LDC: lower customs 
duties and a reduction in the number of products subject 
to quotas could reduce the advantages to be gained 
from the GSP. It goes without saying that products 
which have been 'liberalized' under the General Agree­
ment on Tariffs and Trade (GATT) should be removed 
from the GSP list and bound, without other compen­
sation, under GATT rules, which are more firmly-based 
than GSP rules, in that they are contractual and cannot 
be unilaterally revoked. 
15. In conclusion, the Committee would reiterate the 
points made in previous ESC Opinions on the GSP 
(particularly that of 29 September 1988) as regards: 
automatic re-application of normal GATT rules once 
tariff quotas and/or ceilings have been taken up; the 
need to take every possible opportunity to encourage 
the introduction of appropriate social policies in LDC, 
on the basis of basic International Labour Organization 
(ILO) conventions; the need to exclude from the GSP 
any categories of product which are the subject of 
dumping verification procedures, particularly as 
regards the more vulnerable sectors of the chemical 
industry. 
16. The Committee insists that South Korea should 
be excluded from the GSP on the grounds given in 
paragraph 7 above. Whilst it does not deny that South 
Korea's discrimination as regards protection of EEC 
intellectual property is a cause of tension in EEC-
South Korean relations and could therefore result in 
retaliatory action, the Committee feels that it would be 
preferable for the issue to be dealt with in the appropri­
ate international bodies. 
17. The Committee hopes that the Commission will 
draw up its proposals for the 1991-2000 GSP framework 
scheme as soon as possible, so as to have the necessary 
time and facts at its disposal in order to deliver its 
Opinion on the subject. 
The Chairman 
of the Economic and Social Committee 
Alberto MASPRONE