27.11.  76 Official  Journal  of the European  Communities No C 281/17 
Opinion  on the European  Community's  Generalized  Tariff  Preferences  scheme  for 1977 
The text  referred  to the Committee  has not been  published  in the Official  Journal  of the 
European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 16 July  1976,  the Council  referred  the abovementioned  subject  to the Economic  and 
Social  Committee  in accordance  with  Article  198  of the  Treaty  establishing  the 
European  Economic  Community. 
B. OPINION  OF  THE  ECONOMIC  AND  SOCIAL  COMMITTEE 
The Economic  and  Social  Committee  prepared  its opinion  on the  above  matter  at its 
141st  plenary  session,  held  in Brussels  on 29 and  30 September  1976. 
The full  text  of the opinion  is as follows: 
THE  ECONOMIC  AND  SOCIAL  COMMITTEE, 
Having  regard  to  the  Treaty  establishing  the 
European  Economic  Community,  and  in particular 
Article  198  thereof, 
Having  regard  to the request  made  by the Council  of 
the European  Communities  on 16 July  1976  for an 
opinion, 
Having  regard  to the decisions  taken  by its Bureau  on 
24 May  1976,  instructing  the  Section  for  External 
Relations  to draw  up an opinion  on the matter, 
Having  regard  to its earlier  opinions  on this  subject 
and in particular  the  opinion  of 24  September 
1975  I1), 
Having  regard  to the  oral  report  made  by  the 
Rapporteur,  Mr Evain, 
Having  regard  to the opinion  adopted  by the Section 
for External  Relations  at its meeting  on 14 September 
1976, 
Having  regard  to the discussions  at its 141st  plenary 
session  of 29 and  30 September  1976  (meeting  on 29 
September  1976), 
HAS  ADOPTED  THE  FOLLOWING  OPINION 
unanimously,  with  seven  abstentions: 
H OJ  No C 286,  15. 12. 1975. I. The  proposals  for  Generalized  Tariff  Preferences 
for 1971 
1. This  is the Commission's  seventh  annual  set of 
proposals  on  generalized  tariff  preferences  for 
imports  from  a number  of developing  countries  and 
territories.  The  Generalized  Tariff  Preferences 
Scheme  has  been  in operation  since  1971,  following 
the Community's  unilateral  offer  of tariff  preferences 
for 10 years  made  to UNCTAD  in 1969. 
The Generalized  Preferences  Scheme  covers  a number 
of agricultural  products  falling  within  Chapters  1 to 
24 of the  Common  Customs  Tariff  (CCT)  and  all 
manufactured  and  semi-manufactured  industrial 
products  falling  within  Chapters  25 to 99 of the 
CCT.  It grants  reduced  tariffs  on imports  of the 
agricultural  products  covered  — five  of which  are 
also subject  to quotas  — and  on coir  and  jute,  and 
duty-free  entry  up to certain  quota  limits  or ceilings 
for industrial  products. 
2. In  respect  of processed  agricultural  products, 
the Commission's  proposals  for 1977  incorporate  the 
following  improvements  on the 1976  arrangements: 
— the  inclusion  of 46 new  items, 
— 70 improvements  in preferential  margins  (e.g., 
Virginia  tobacco,  spices,  vegetable  oils,  cut 
flowers). 
No C 281/18 Official  Journal  of the European  Communities 27.11.76 
3. The  proposals  for  industrial  products  other 
than textiles  include: 
— raising  the level  of ceilings  and  quotas  by about 
35 % in the case  of sensitive  products,  45 % in 
the case  of semi-sensitive  products  and  57 % in 
the case  of  non-sensitive  products.  These 
increases  result  from  changing  the reference  year 
for calculating  ceilings  (1974  instead  of 1971)  as 
originally  planned, 
— freezing  the 1976  tariff  quotas  for footwear  and 
steel products. 
4. For  coir  and  jute  products,  the  1976 
arrangements  are  to be maintained,  as a further 
reduction  (to zero)  of the tariff  on coir  is due  to take 
place  on 1 January  1978,  and  negotiations  are still 
going  on with  India  and  Bangladesh  on jute  products. 
5. For  other  textiles,  the Commission  is proposing: 
— raising  of the  overall  ceiling  from  75 323 to 
79131  metric  tons  (this  represents  a 5 % 
increase), 
— extending  textiles  preferences  to  beneficiary 
territories  that  are  dependent  on  Community 
Member  States  or on non-member  countries, 
— introduction  of a dual  system  for some  products, 
involving  more  restrictive  arrangements  for 
countries  that  are considered  more  advanced  and 
more  competitive.  These  are  countries  fulfilling 
both  the  following  objective  criteria:  GNP  per 
capita  of $300  or more  (World  Bank  1972)  and 
accounting  for 6 % or more  of EEC  imports  of 
the product  in question  under  the  GSP.  For  28 
products  the volume  of imports  allowed  into  the 
EEC  duty  free  is to be divided  into  two  parts: 
30 % for 'competitive'  beneficiaries,  with  no limit 
('buffer')  on the proportion  of this  that  may  come 
from  a single  beneficiary  country,  but  with 
individual  Member  State  quotas  and  a reserve  for 
distributing  to Member  States  who  use  up their 
initial  quota;  the  other  70  % for  the  other 
beneficiaries,  with  no individual  Member  State 
quotas  but  the usual  50 % limit  on the amount 
that may  come  from  a single  beneficiary  country, 
for one  product,  the volume  of which  allowed  in 
duty  free  is divided  into  individual  Member  State 
quotas  without  leaving  a reserve,  the 'competitive' 
countries  are  each  limited  to 5 % of the  total, 
while  any of the others  may  take  up to 30 %. For 
all the other  products  (six  sensitive  products  with 
individual  Member  State  quotas,  14 semi-sensitive 
and 54 non-sensitive),  the usual  system  of overall EEC  ceilings  and  limits  per beneficiary  country  is 
to be applied  to all beneficiaries  alike. 
6. Other  general  features  of the  Commission's 
proposals  are: 
— little  change  to the  list of beneficiary  countries, 
apart  from  extension  of textile  and  apparel 
preferences  to dependent  beneficiary  territories, 
— rules  of origin  the  same  as in 1976  (except  for 
adjustments  made  necessary  by the  inclusion  of 
new agricultural  products), 
— continued  gradual  extension  of the  system  of 
leaving  a reserve  when  allocating  the individual 
Member  State  quotas  of imports  of products  for 
which  individual  Member  State  quotas  are  still 
fixed  (reserve  system  now  extended  to preserved 
pineapples  other  than  in slices,  diodes  and 
transistors,  and  certain  types  of chairs), 
— continuation  of Community  action  to publicize 
the advantages  of  the  scheme  among 
beneficiaries. 
7. Finally,  the  explanatory  memorandum 
introducing  the  proposals  gives  an idea  of the  use 
beneficiaries  have  made  of the GPS  in the past.  The 
figures  for 1974  show  that  in that  year  the top  ten 
beneficiaries  accounted  for  about  72 % of imports 
under  the  scheme,  worth  1 500 million  units  of 
account.  These  were:  Yugoslavia  (288  million  u.a.), 
Hong  Kong  (219  million  u.a.),  Brazil  (189  million 
u.a.),  India  (181  million  u.a.),  South  Korea  (154 
million  u.a.),  Singapore  (119  million  u.a.),  Pakistan 
(115 million  u.a.),  Mexico  (98 million  u.a.)  Romania 
(76 million  u.a.)  and  Iran  (61 million  u.a.). 
Pakistan  led the field  for cotton  textiles,  accounting 
for 29 % of imports  under  the scheme,  followed  by 
India  with  23 %, and  then  Egypt,  Mexico,  South 
Korea  and  Yugoslavia. 
Yugoslavia,  Iran  und  South  Korea  together  accounted 
for 44 % of imports  of non-cotton  textiles. 
II. Comments  of the Economic  and  Social  Committee 
1. The  Committee  agrees  with  the policy  behind 
the Commission's  annual  proposal  of  tariff 
preferences  for imports  from  all developing  countries. 
27. 11. 76 Official  Journal  of the European  Communities No C 281/19 
In that  connection,  the  Committee  refers  to the 
General  comments  on the future  development  of the 
GSP contained  in its earlier  opinion  on the  same 
subject.  The  General  comments  referred  to stress: 
— that  the  scheme  must  be  applied  to those 
countries  who  need  it most, 
— that  the scheme  must  be part  and  parcel  of a set 
of international  rules  and  obligations, its internal  cohesion  and  move  forward  in the 
direction  of economic  integration,  on the  other,  is 
widening.  Therefore,  the Committee  would  stress  the 
need  for  proper  coordination  of the  Community's 
action  in its foreign  policy  (e.g.,  generalized  tariff 
preferences)  with  the  medium-term  forecasts  for 
industrial  and  agricultural  development  in  the 
Community,  and  for  increasingly  close  cooperation, 
having  regard  to economic  trends,  between  the 
Community  and  the developing  countries. 
— that  the  schemes  applied  by  the  various 
industrialized  nations  must  be  gradually 
standardized. 
Having  scrutinized  the  1977  proposals,  the 
Committee  would  also  make  the  following 
comments. 
2. The  Committee  stresses  the  importance  of 
up-to-date  statistics  when  assessing  GSP  proposals. 
The Committee  deplores  the  fact  that  the  1974 
figures  are  the  latest  available.  The  Committee 
stresses  the  need  to improve  and  speed  up  the 
compilation  of statistics  in the  Community.  The 
Committee  believes  moreover  that  as regards  the 
main  sectors,  there  is a strong  case  for  making  a 
global  assessment  of  the  consequences  of  the 
Community's  commitments  vis-a-vis  non-member 
countries. 
3. The  proposed  Generalized  Tariff  Preferences 
Scheme  for 1977  represents  a sizeable  expansion  of 
the preferences  both  for  processed  agricultural 
products  (where  46 new  items  have  been  added),  and 
for industrial  goods  other  than  textiles,  where  the 
ceilings  have  been  raised  by an average  of 50 %. This 
is a big  jump  in the  expansion  of the  preferences 
scheme,  but  it is doubtless  justified,  in view  of the 
responsibility  the  Community  has  towards  the 
developing  countries.  Nevertheless  the  requisite 
prudence  should  be observed. 
4. The  Committee  is conscious  of the  fact  that 
unemployment  is still  a problem  throughout  the 
economy,  and  particularly  so in certain  industries  and 
areas  of the Community.  The  discrepancy  which  has 
been  evident  for  some  years  now  between  the 
Community's  readiness  to open  up its markets  to the 
world,  on the one  hand,  and  its ability  to strengthen 5. For  example,  it does  not appear  that  an estimate 
can have  been  made,  product  by product,  of the 
likely  impact  of the  proposed  new  concessions  on 
agriculture  and  processed  agricultural  products. 
Apart  from  a number  of specialized  products  such  as 
money,  asparagus,  truffles,  frozen  small  fruit  and 
glace  cherries,  the Committee  would  mention  the case 
of Virginia  tobacco  and  the  effect  the  increased 
quotas  of imports  could  in the  end  have  on the 
incomes  of  Community  producers,  under  the 
common  market  organization  for this  product. 
6. The  Committee  wonders  what  the  motives  are 
behind  the  Commission's  proposals.  The  primary 
motive  would  appear  in fact  to be political,  i.e.,  the 
wish  to demonstrate  in the clearest  possible  way  the 
Community's  desire  to help  the developing  countries. 
The Section  is wholeheartedly  in favour  of this,  but it 
considers  that  the  pattern  of use  of the  Generalized 
Preferences  Scheme  over  the  past  few  years  proves 
that priority  should  be given  at present  to making  it 
work  better,  rather  than  extending  it. Reducing  the 
Scheme's  complexity  and  increasing  the  still 
inadequate  knowledge  many  beneficiaries  have  of the 
Scheme  would  be the best  way  at present  of opening 
up the EEC  market  effectively  to the products  of the 
developing  countries  that  need  it most. 
7. In  its opinion  of September  1975  on the  same 
subject,  the Committee  stressed  that  it considered  it 
very important  that  the granting  of tariff  preferences 
to the developing  countries  should  proceed  on as far 
as possible  matching  lines  among  the  various 
industrialized  countries  (in  particular  the  United 
States,  Japan,  Canada  and  Australia).  Only  limited 
progress  has  been  made  in this  respect.  It is true  that 
the United  States  introduced  a scheme  of tariff 
preferences  on 1 January  1976,  but  this  scheme  has 
not been  in existence  long  enough  to enable  a serious 
comparison  to be made,  particularly  since  it seems, 
from  the outset,  to be more  selective  and  restrictive 
than  the  Community  scheme.  There  is moreover  no 
No C 281/20 Official  Journal  of the  European  Communities 27. 11.76 
doubt  that  the  changes  the Community  makes  each 
year to its  own  system  will  make  comparisons 
difficult  for several  years  to come.  It is thus  possible 
that unaligned  systems  will  continue  indefinitely. 
8. The  Commission's  proposals  for 1977  come  at a 
time  when  the  Community  is getting  ready  to 
negotiate  multilateral  tariff  concessions  in the GATT 
round.  It is proposed  that  the  tropical  products 
concession  which  is being  offered  in the  GATT 
negotiations  should  be applied  unilaterally  under  the 
Generalized  Preferences  Scheme  for 1 January  1977. 
The Committee  wonders  whether  going  ahead 
unilaterally  with  such  concessions  might  not  reduce 
the Community's  chances  of securing  worthwhile 
reciprocal  concessions  from  certain  developing 
countries  that  have  already  reached  a certain  level  of 
industrialization. 
9. The  Committee  is pleased  that  the Commission 
has taken  some  action  on  a point  which  the 
Committee  made  in its 1975  Opinion,  namely  that  it 
is becoming  essential  to  differentiate  between 
beneficiaries  of the Scheme  according  to their  degree 
of competitiveness,  so as to reserve  the benefits  of the 
Scheme  to the greatest  possible  extent  for the poorer 
countries. 
10. The  Committee  regrets,  however,  that  the 
Commission  has  restricted  the  application  of this 
principle.  The  Committee  wants  the principle  to be extended  as quickly  as possible  to all groups  of 
products  covered  by  the  Generalized  Preferences 
Scheme.  The  Commission  should  not  hesitate  to 
withdraw  generalized  preferences  from  those 
developing  countries  which  have  attained  a certain 
level  of competitiveness. 
11. More  generally,  the Committee  regrets  that  the 
Commission  has  so far  failed  to give  a practical 
demonstration  of the intention  — which  it announced 
particularly  in the Generalized  Preferences  Scheme  — 
of making  the  Scheme,  though  it was  to remain 
autonomous,  operate  within  an  economic  and 
commercial  system  governed  by international  rules 
and obligations  involving  rights  and  duties  both  for 
the donor  and  beneficiary  countries.  Already  in its 
opinion  of September  1975  the Committee  considered 
it very  important  that  countries  abided  by such  rules 
and obligations,  with  particular  reference  to 
international  trade  (dumping,  subsidies,  disregard  for 
standards  of wages  and  conditions  for labour,  etc.). 
(Adherence  to these  rules  should  first  be required  of 
beneficiaries  that  have  already  reached  a certain  level 
of industrial  development). 
Done  at Brussels,  29 September  1976. 
The Chairman 
of the  Economic  and  Social  Committee 
Henri  CANONGE 
Opinion  on the continuation  and  implementation  of a European  Community  policy  and 
action  programme  on the environment  (draft  resolution  of the Council,  presented  by the 
Commission) 
The text  referred  to the Committee  has not been  published  in the Official  Journal  of the 
European  Communities. 
A. LEGAL  BASIS  FOR  THE  OPINION 
On 6 April  1976,  the Council  referred  the abovementioned  subject  to the Economic  and 
Social  Committee  in accordance  with  Article  198  of the  Treaty  establishing  the 
European  Economic  Community.