EUROPEAN COMMUNITIES – CONDITIONS FOR THE GRANTING OF TARIFF PREFERENCES TO DEVELOPING COUNTRIES
Document: Request for Consultations by India
Date: 12 March 2002
Document codes: WT/DS246/1; G/L/521
Complainant: India
Respondent: EU
Third parties: Bolivia, Plurinational State of, Brazil, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mauritius, Nicaragua, Pakistan, Panama, Paraguay, Peru, Sri Lanka, Venezuela, U.S.
Dispute stage: Appellate Body
Agreements cited: Art. I:1  GATT 1994

EUROPEAN COMMUNITIES – CONDITIONS FOR THE GRANTING
OF TARIFF PREFERENCES TO DEVELOPING COUNTRIES
Request for Consultations by India
The following communication, dated 5 March 2002, from the Permanent Mission of India to
the Permanent Delegation of the European Commission and to the Chairman of the Dispute
Settlement Body, is circulated in accordance with Article 4.4 of the DSU.
My authorities have instructed me to reques t consultations with the European Communities
(the EC) pursuant to Article 4 of the Understanding on Rules and Procedures Governing the
Settlement of Disputes, Article XXIII:1 of the General Agreement on Tariffs and Trade 1994 (the
GATT 1994) and paragraph 4(b) of the Decision of 28 November 1979 of the GATT Contracting
Parties on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of
Developing Countries (L/4903, BISD 26S/203) (the Enabling Clause) regarding the conditions under
which the EC accords tariff preferences to the developing countries under its current scheme of
generalized tariff preferences (the GSP scheme).
 1
India is particularly concerned about the following conditions:
1. The tariff preferences accorded under the special tariff arrangements for combating
drug production and trafficking are available only to specified countries selected by
the EC; and
2. The tariff preferences accorded under the special incentive arrangements for the
protection of labour rights and the environment are accorded only to countries that
meet labour and environmental policy standards determined by the EC.
India considers that the tariff preferences accorded under these special arrangements create undue
difficulties for India's exports to the EC, including for those under the general arrangements of the
EC's GSP scheme, and nullify or impair the benefits accruing to India under the most-favoured-nation
provisions of Article I:1 of the GATT 1994 and paragraphs 2(a), 3(a) and 3(c) of the Enabling Clause.
India notes that there are two important requirements that tariff preferences to products
originating in developing countries must meet under WTO law. First, according to paragraph 2(a) of
the Enabling Clause, the preferences must be granted in accordance with the Generalized System of
Preferences described in the waiver that CONTRACTING PARTIES to the GATT 1947 adopted on
25 June 1971.
2 This decision refers to the UNCTAD agreement on the establishment of a system

1 Council Regulation (EC) No. 2501/2001 of 10 D ecember 2001 applying a scheme of generalized
tariff preferences for the period from 1 January 2002 to 31 December 2004 (Official Journal L346, 31/12/2001).
2 Para. 2(a) and footnote 3 of the Enabling Clause.

providing for "generalized, non-reciprocal and non-discriminatory preferences beneficial to the
developing countries in order to increase the export earnings, to promote the industrialization and to
accelerate the rates of economic growth of these countries". 3 Second, according to paragraphs 3(a)
and 3(c) of the Enabling Clause, the preferences "shall be designed to facilitate and promote the trade
of developing countries" and "respond positively to the development, financial and trade needs of
developing countries". It appears to India that the conditions under which the EC accords tariff
preferences under the special arrangements cannot be reconciled with these two requirements.
India requests for these reasons consultations with the EC on the question of the compatibility
of the special arrangements under the EC's G SP scheme with Article I:1 of the GATT 1994 and
paragraphs 2(a), 3(a) and 3(c) of the Enabling Clause. India reserves its right to raise further factual
or legal issues during the course of the consultations.
India looks forward to receiving your reply to this request. I propose that the date and venue
of these consultations be agreed between our two Missions.
Preferences (L/3545, BISD 18S/24, 25).