No C 16/16 Official Journal of the European Communities 23.1. 75 
Opinion on the proposals and communications concerning the grant of generalized 
tariff preferences for 1975 on semi-manufactured products falling within Chapters 1 to 
24 of^ the Common Customs Tariff and manufactured and semi-manufactured products 
falling within Chapters 25 to 99, originating in developing countries 
The text referred to the Committee was published in Official Journal of the European 
Communities No C 110 of 21 September 1974, pages 56 to 80. 
A. LEGAL BASIS FOR THE OPINION 
On 8 July 1974, the Council referred the abovementioned proposals to the Economic and 
Social Committee under Article 198 of the Treaty establishing the European Economic 
Community. 
B. OPINION OF THE ECONOMIC AND SOCIAL COMMITTEE 
The Economic and Social Committee drew up its Opinion at its 125th plenary session, 
held in Brussels on 28 November 1974. 
The Opinion is published below: 
THE ECONOMIC AND SOCIAL COMMITTEE, 
Having regard to the referral on 9 July 1974 by the 
Council of the European Communities of the 
proposals and communications concerning the grant 
of generalized tariff preferences for 1975 on 
semi-manufactured products falling within Chapters 
1 to 24 of the Common Customs Tariff and 
manufactured and semi-manufactured products 
falling within Chapters 25 to 99, originating in 
developing countries; 
Having regard to Article 198 of the Treaty 
establishing the European Economic Community; 
Having regard to its Rules of Procedure, and in 
particular Article 22 thereof; 
Having regard to the decision taken by its Bureau on 
16 July 1974, instructing the Section for External 
Relations to prepare the Committee's work on the 
matter; 
Having regard to the Opinion adopted by the Section 
for External Relations at its meeting on 5 November 
1974; 
Having regard to the oral report made by the 
Rapporteur, Mr Evain; 
Having regard to the discussions at its 125th plenary 
session of 28 November 1974, HAS ADOPTED THE FOLLOWING OPINION 
by a unanimous vote: 
Subject to the following comments, the Economic 
and Social Committee approves the proposals and 
communications concerning the grant of generalized 
tariff preferences for 1975 on semi-manufactured 
products falling within Chapters 1 to 24 of the 
Common Customs Tariff and manufactured and 
semi-manufactured products falling within Chapters 
25 to 99, originating in developing countries: 
1. General comments 
1.1. The system of generalized tariff preferences 
plays a considerable part in furthering relations 
between the Community and the developing 
countries. Generalized tariff preferences are a key 
element of the overall policy on Community 
assistance for developing countries, and cannot be 
divorced from the other instruments available to the 
Community in this field. 
1.2. The Committee approves the proposals for 
• 1975 which have been submitted by the Commission 
and which are aimed at improving and extending the 
present system. However, it wishes to make various 
comments on the evolution and future development 
23.1. 75 Official Journal of the European Communities No C 16/17 
of the system, since it considers these points to be of 
vital importance. 
1.3. The Community should scrutinize the results 
which the generalized tariff preferences actually have 
in practice, for it is vital that in future the system 
should be of real benefit to the poorest developing 
countries, whose economic situation has recently 
deteriorated still further. 
1.4. The Community should also take steps to 
ensure on the one hand a greater consistency between 
the individual aspects of its development cooperation 
policy, and on the other hand a better balance 
between the concessions made to developing 
countries under the various arrangements. 
1.5. In the specific case of relations with the ACP 
(African, Caribbean and Pacific) countries, this 
consistency and balance should be achieved when the 
annual proposals are drawn up, - through 
consultations between the Community and its 
Associated States. 
1.6. As far as the impact of the GATT multilateral 
negotiations are concerned, it should be possible to 
safeguard the advantages granted under the 
generalized tariff preferences system either by using 
different time schedules for tariff reductions under 
GSP schemes and tariff reductions under the future 
GATT agreements or by providing for exceptions to 
the general rules for tariff reductions. 
1.7. The Community has always urged that its 
industrialized partners should introduce their own 
generalized preferences systems as quickly as 
possible, so that responsibilities and the financial 
burden may be shared fairly among the donor 
countries. This has not yet been achieved. 
1.8. Attention should. also be paid to the 
potential impact on the Community's exporters of 
competition distortions caused by differences in the 
rules governing application of the GSP. 
1.9. The Committee notes with satisfaction that 
the Commission's proposals on generalized 
preferences for 1975 were submitted as early as June 
1974. It is very important that both Community 
importers and exporters in the developing countries 
should be aware in good time of the rules they will 
have to abide by. 2. Specific comments 
2.1. Beneficiary countries 
2.1.1. The Commission's proposals say nothing 
new about determining which countries are to be 
beneficiaries, but political motives must not £e 
allowed to outweigh economic considerations. So far, 
countries have been chosen on an overall basis and 
additions to the original list have been made 
according to the merits of each individual case. 
2.1.2. With an eye to a long-term policy, it would 
be worth considering what the Community's criteria 
should be for granting generalized tariff preferences 
so as to ensure that the preferences genuinely benefit 
the countries which need them most. The criteria 
should be economic, but also take in social 
considerations. 
2.1.3. It must also be asked whether it is desirable 
that generalized tariff preferences should retain their 
unilateral character in the long term. Would it not 
be better to consider the developing countries in 
future as genuine partners to whom aid is -not 
allotted unilaterally, but iri accordance with certain 
economic, commercial and social rules? 
2.1.4. In this connection the question has been 
raised whether it is economically desirable to apply 
this system to the state-trading countries of Eastern 
Europe which cannot be regarded as developing 
countries. It is also debatable whether generalized 
preferences should be granted to countries which aid 
their exports in what is considered an 'unhealthy' 
manner, or to countries which employ concerted 
and/or discriminatory practices aimed at artificial 
restriction of the supply of certain goods or raw 
materials. 
2.1.5. It would also be worth examining how far 
the annual review of the arrangements applied by the 
Community could be geared, inter alia, to the 
medium- and long-term development programmes 
of the beneficiary countries. 
2.2. Changes in the world economic situation over 
the past year 
2.2.1. Due to the oil crisis, radical changes have 
taken place over the past year in the economic and 
No C 16/18 Official Journal of the European Communities 23.1.75 
financial situations of certain beneficiary countries 
and of the Community itself. 
— some beneficiary countries which are also oil 
producers now have large balance-of-payments 
surpluses and/or are rapidly industrializing; 
— other beneficiary countries, which are among the 
poorest, have seen a further deterioration in their 
economic situation; 
— the EEC is entering a phase of slower growth, 
which is making certain industries more 
vulnerable (repercussions on employment). 
2.2.2. The changes over the past year make it even 
more necessary to: 
— Develop the requisite means of measuring the true 
impact of the system of generalized preferences on 
economic activity and employment in the 
Community — not just aggregate impact, which 
has so far been slight, but also the effects on 
particular industries, which in certain cases may 
be more marked. The potential dangers, 
particularly for employment, demand that the 
Community should be able to act quickly to avert 
a sudden and irreparable deterioration in 
particular industries. The Commission should 
improve its information facilities and its capacity 
for action in this field. 
— Ensure that the regulatory mechanisms (quotas, 
ceilings, cut-offs, etc.) work satisfactorily and are 
applied in the light of requirements arising from 
the Community's policy for industry and 
individual sectors, and of the need to avoid 
distortions in competition and in the situation of 
consumers in the individual Member States. 
— Develop machinery for cushioning any adverse 
effects of the GSP on economic activity and 
employment (aids for adaptation and retraining, 
regional policy measures, etc.). Action should be 
taken here both by the Community and by the 
individual Member States. 
— Adopt special measures to enable the poorest 
countries, which are the hardest hit by increased 
oil prices, to derive full advantage from the 
preferences granted. 
2.3. The products concerned 
2.3.1. Special attention must be devoted to certain 
products. 2.3.2. These include processed agricultural 
products (operation of the safeguard clause), textiles 
(transitional measures pending implementation of the 
Multifibres Agreement) and tobacco (changeover 
from tariff quotas based on value to quotas based on 
tonnage). 
2.3.3. As regards sensitive products, the Committee 
accepts the Commission's proposal of a reduction in 
the number of quotas, on the assumption that this 
proposal is based on a exhaustive analysis using the 
most up-to-date data available on the relevant 
products. The Committee did not have any means of 
verifying that this is the case. 
2.3.4. In the case of quasi-sensitive products, it is 
vital that the regulators in the system of generalized 
tariff preferences should function efficiently and 
promptly. 
2.3.5. As regards the possible changes to the 
import rules in force, the Committee took note of 
information supplied by Commission departments to 
the effect that in principle changes to these rules were 
only made once a year and that at all events a 
minimum of one month's notice was given for their 
implementation. 
2.3.6. To mitigate the effects of inflation and price 
instability on the functioning of the GSP, the 
Committee recommends basing the regulators 
wherever possible on specific data (e.g. weight or 
quantity) rather than on value. 
2.3.7. The Committee was informed after 
completing its work that the Commission had 
finalized its proposals on the application in 1975 of 
generalized tariff preferences to Certain textiles 
originating in developing countries. As the 
Committee did not have the details of the proposals 
to hand, it reserves the right to comment on them at 
a later date. 
2.4. The detailed rules governing the application of 
the preferences and the regulators 
2.4.1. Since the GSP is intended for use by 
exporters in developing countries and Community 
importers, it is vital that the rules governing the 
application of the preferences and the regulators 
should be both simple and effective, two 
requirements which may in certain cases be difficult 
to reconcile. 
23.1. 75 Official Journal of the European Communities No C 16/19 
2.4.2. The proposed reduction in the number of 
tariff quotas for sensitive products will make it 
impossible to work an observation system for the 
large majority of products except on an ex post facto 
basis. 
2.4.3. It follows that the observation system and, 
in particular, the ceiling mechanism for products 
under special observation must be effective. It 
appears that the Commission is technically equipped 
to carry out such observation in cooperation with the 
Member States' customs authorities (surveillance of 
entry into the customs territory of the Community at 
intervals of ten days or even on a daily basis). But 
there must also be a political determination to ensure 
that the observation system is effective in practice. 
2.4.4. The diversity and complexity of the 
instruments used (tariff quotas, ceilings for products 
under special observation, theoretical ceilings, 
cut-offs, etc.) calls for comment. 
— Application of the machinery advocated by the 
Commission presupposes supervision by a 
political body at European level. The supervision 
in question must be compatible with the speed of 
action which is required in this field. 
— Consideration should be given to introducing 
procedures for consultation between the various 
interests at Community level, so as to allow a 
regular, systematic evaluation of the impact of the 
generalized preferences system. In this connection, 
the Committee attaches importance to the 
supplementary measures contemplated by the 
Commission with respect to information, 
documentation, trade promotion and market 
research. — Particular attention must be paid to the 
endeavours made to share the advantages more 
fairly among the beneficiary countries, for 
example by using cut-offs. The Committee 
applauds such endeavours to reduce disparities in 
the application of preferences, since so far these 
have mainly benefitted the richest of the 
beneficiary countries. 
2.4.5. As far as rules of origin are concerned, the 
Committee has noted that the Commission wants to 
introduce a system of cumulative origin in favour of 
regional groups of countries. The Committee 
endorses the Commission's aims, but points out that 
the application of such a system would require 
monitoring facilities, inter alia, in order to prevent 
deflection of trade. In this connection, the Committee 
would refer to the Committee's Opinion on questions 
connected with the negotiations between the 
Community and the African, Caribbean and Pacific 
States (*). 
Done at Brussels, 28 November 1974. 
The Chairman 
of the Economic and Social Committee 
Henri CANONGE 
H OJ No C 116, 30. 9. 1974. 
Opinion on the proposal for a second Council Directive amending the Directive of 
23 November 1970 concerning additives in feedingstuffs 
The text referred to the Committee was published in Official Journal of the European 
Communities No C 104 of 13 September 1974, pages 93 and 94. 
A. LEGAL BASIS FOR THE OPINION 
On 31 July 1974, the Council referred the abovementioned proposal to the Economic 
and Social Committee under Articles 43 and 198 of the Treaty establishing the European 
Economic Community.