Opinion of the Economic and Social Committee on the 'Proposal for a Council Regulation (EC) applying the special incentive arrangements concerning labour rights and environmental protection provided for in Articles 7 and 8 of Council Regulations (EC) Nos 3281/94 and 1256/96 applying the scheme of generalized tariff preferences in respect of certain industrial and agricultural products originating in developing countries'
Date: 1997-12-10
Institutions: European Economic and Social Committee
Subjects: agricultural product, developing countries, generalised preferences, industrial product, international standard

9.3.98

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Official Journal of the European Communities

C 73/51

extend the Karolus programme for a two-year tran-
sitional period, to widen its application during that
period to other specified states and to develop a modified
programme with a wider scope, and with possible

participation of the workers, to take the place of the
existing programme at the end of the transitional period.
The ESC would wish to be consulted on the form and
content of the modified programme in due course.

Brussels, 10 December 1997.

The President

of the Economic and Social Committee

Tom JENKINS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) applying the special incentive arrangements concerning labour rights and environmental
protection provided for in Articles 7 and 8 of Council Regulations (EC) Nos 3281/94 and
1256/96 applying the scheme of generalized tariff preferences in respect of certain industrial
and agricultural products originating in developing countries’

(98/C 73/15)

On 14 November 1997 the Council decided to consult the Economic and Social Committee,
under Article 198 of the Treaty establishing the European Community, on the above-mentioned
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 25 November
1997. The rapporteur working alone was Mr Etty.

At its 350th plenary session (meeting of 10 December 1997), the Economic and Social
Committee adopted the following opinion by 112 votes to one with 11 abstentions.

1. General comments

2. Specific Comments

In its opinion on the Proposal for a Council Regulation
(EC) applying a three-year scheme of generalized tariff
preferences (1995-1997) in respect of certain industrial
products originating in developing countries and the
Proposal for a Council Regulation (EC) extending into
1995 the application of Regulations (EEC) No 3833/90,
(EEC) No 3835/90 and (EEC) No 3900/91 applying
generalized tariff preferences in respect of certain
agricultural
developing
countries (CES 1159/94), the Committee had already
expressed its support for the special incentive arrange-
ments which the Commission has now translated into
concrete proposals. The Committee strongly welcomes
the Commission’s proposals as providing most adequate
and effective provisions for positive measures to
promote respect for labour and environmental stan-
dards in GSP beneficiary countries.

originating

products

in

As regards the measures proposed to stimulate
2.1.
compliance with certain international labour standards,
the Committee welcomes the strong emphasis given by
the Commission in Articles 3, 4 and 5 that as a
prerequisite for access to improved preferences, potential
beneficiary countries will have to demonstrate that both
their law and their practice provide a framework within
which freedom of association and abolition of child
labour can realistically be guaranteed, as well as to
the importance of strict monitoring and cooperation
procedures, on-the-spot checks and effective technical
assistance to develop suitable administrative and techni-
cal monitoring infrastructures (Articles 6 and 7).

In this context, we would emphasize the importance of
reference to the reports of the competent UN authorities
in these areas, namely the Committee on Freedom of
Association of the ILO, the Committee of Experts on the
Application of Conventions and Recommendations of
the ILO and the UN Committee on the Rights of the
Child.

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2.2.
The Committee also expresses its concern that
the practical application of the new system of incentives
detracts from the advantages of the 1995 reform of the
overall system, namely simplicity, transparency and
reliability.

After several decades of cooperation with the beneficiary
countries, these factors have proved decisive for the
effectiveness of these measures to promote trade.

foreseeable future. Furthermore, the Committee hopes
that the Member States of the EU will contribute actively
to the work on the forthcoming new ILO Convention
on the most exploitative and dangerous forms of child
labour, due for 1999, that they will ratify it as quickly
as possible after its adoption by the International Labour
Conference, and that the Council will subsequently
include it in the now proposed instrument in addition
to ILO Convention 138.

This should in no way be endangered.

2.3.
At the same time, however, the Committee
expresses its regret and disappointment that the Com-
mission proposal restricts the new instrument to these
three ILO Conventions on Freedom of Negotiation and
Protection of the Right to organize (No 87), on the Right
to Organize and Collective Bargaining (No 98), and on
Minimum Age (No 138). This is a departure from earlier
positions as regards international trade and labour
standards, taken by the Commission and supported by
the Economic and Social Committee, which included
the ILO Conventions on Forced Labour and on the
Abolition of Forced Labour (Nos 29 and 105) and on
and Occupation)
Discrimination
(No 111). These three Conventions, together with
Convention Nos 87 and 98, are considered to be the
basic human rights’ conventions of the ILO. The
Commission ignores them in this proposal without
giving any explanation. While recognizing that forced
labour is already addressed in Article 7 of the existing
GSP regulation, the Committee nonetheless feels that
the elimination of forced labour could still be rewarded
by additional preferences.

(Employment

Another related point which requires clarifi-
2.4.
cation is that the Commission has included the Minimum
Age Convention (No 138) without any further comment.
One comment the Committee wishes to make is that,
while it fully agrees that the problem of child labour
should be addressed in the proposed Council regulation,
it is regrettable that four out of the fifteen Member
States of the European Union have not ratified the
ILO Convention on Minimum Age. Once again the
Committee wishes to make the point that in such cases
the EU’s demands will be much more credible if all its
Member States meet themselves the criteria they wish
others to meet. With regard to Convention 111 (Discrimi-
nation, Employment and Occupation) the Committee
reiterates its earlier observations that three Member
States (Ireland, Luxembourg, United Kingdom) have
not yet ratified this ILO instrument. Therefore, the
Committee urges the Commission to take the initiative
for consultations with those Member States, which have
not yet been able to ratify Convention No 138, with a
view to try and overcome the obstacles to do so in the

2.5. With regard to the measures proposed to stimu-
late compliance with international environmental stan-
the Committee understands the difficulties
dards,
expressed with regard to setting up environmental
clauses, but considers that such incentives would still be
desirable insofar as they are practicable. It agrees
with the Commission’s choice for ITTO (International
Tropical Timber Organization) standards as the yard-
stick to be used.

2.6.
The Committee further welcomes the Com-
mission’s proposal (in Articles 3 and 4, and 10 and 11)
to publish all applications for the additional preferences
in the Official Journal in order to allow for all parties
with relevant expertise and information to provide their
evidence. We particularly welcome the acknowl-
edgement in the Commission’s explanatory memo-
randum of the importance of consultation with organ-
izations, in particular the ILO, national trade unions
and international trade union and employers’ federations
as well as specialized NGOs (human rights, environmen-
tal
In
addition to participation in the submission of evidence
as indicated in the memorandum, the Committee would
propose that the new provisions should allow for the
international trade union and employers’ federations to
take part in visits to those countries where there are
particular doubts about respect for labour rights. This
seems appropriate with a view to their role and their
experience in the supervising machinery of the ILO.

including consumers’ organizations.

issues),

2.7.
The Committee concurs with the Commission
that the additional preferences need to be set at a high
level in order to provide a genuine incentive to respect
the labour and environmental standards concerned. For
the same reason, we welcome the proposal that the
additional incentives should apply even to countries that
have graduated from the basic system. Concerning the
likely cost of such measures, we concur with the
Commission’s assessment that, given the lack of respect
for labour rights and environmental protection in many
GSP beneficiary countries, the total impact on the EU is
unlikely to be extremely high and will certainly be far

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lower than the figure of ECU 787,7 million (representing
a theoretical maximum) mentioned in the Commission’s
financial statement accompanying the draft regulation.

2.8.
The Committee does regret, however, the lack
of any reference to the least developed countries (LDCs)
in the Commission’s draft regulation or even in the
explanatory memorandum. For the LDCs, of course,
there would be no possibility of providing enhanced
benefits, due to the fact that their tariff level is already
fixed at zero. This could seriously reduce the scope of
the new provisions as LDCs would have no incentive to
improve their respect for labour rights and environmen-
tal protection. In their case, the Committee would
propose that additional measures must be taken in order
to provide an incentive for least developed countries to
respect labour rights and undertake environmental
protection. Specifically, the GSP preference scheme
needs to be included in discussions on the possibility of
increased development assistance for those countries. In
this context the Committee also refers to its Opinion on
‘Development aid, good governance and the role of the
socio-economic interest groups’ (1) and the standards for
good governance discussed in that text.

2.9.
The Commission’s proposals are slightly ambigu-
ous concerning the procedures for suspension or with-
drawal of additional GSP benefits (Article 14). The
Committee would propose that
the procedure for
representations should be that any party with a legitimate
interest in the case, including representatives of the
economic and social interest groups, could make a
proposal to open an investigation by the Commission.
In order to ensure the good functioning of the new
mechanism, we would propose that an application
for an investigation should automatically lead to the
initiation of an investigation within 30 days, unless good
cause to doubt the bona fides of any complaint can be
demonstrated. We would also propose that, as under
the anti-dumping procedures, provision should be made
for interim measures to be taken to suspend countries
from additional GSP benefits during the course of an
investigation, as this could take some time in order to
respect due procedure.

2.10.
The Committee interprets Article 14(1), refer-
ring to the total or partial suspension of the additional
GSP preferences ‘without prejudice to the possible
application of Article 9 of Regulations (EC) Nos 3281/94
and 1256/96’ to refer above all to the case of ‘fraud’.
The Committee considers that this provision should be
invoked such that any misrepresentation of a product
as having been produced in respect of labour rights
and/or environmental standards when such is not the

(1) OJ C 287, 22.9.1997, p. 44.

case should be considered a case of ‘fraud’ under the
terms of the GSP, so causing any country which, having
first been granted additional preferences, was then found
to be violating labour rights in these areas would stand
to lose not just its additional GSP benefits but its entire
duty-free access under the GSP.

2.11.
The Committee draws the attention to the fact
that current efforts of governments, business, trade
unions and NGOs with regard to social labelling and
codes of conduct for certain products, containing similar
labour and environmental standards as proposed for the
new Council regulation might be impaired by the latter’s
focus on countries. While the Committee thinks that the
country approach is the most practical, it requests the
Commission to consider ways and means by which
successful self-regulation could be exempted from the
suspension or withdrawal procedures foreseen in the
present proposal and to draw up a complementary
procedure.

2.12.
In view of the large number of GSP beneficiary
countries, one might expect a considerable amount of
work for the Commission if all countries interested in
the new scheme apply rapidly and more or less
simultaneously for the new benefits. Under
such
the Committee would emphasize
circumstances,
nonetheless the need for a cautious approach by the
Commission in order to provide time to properly
evaluate respect for the new provisions in potential
beneficiaries. We would therefore emphasize the need
for an evaluation of the present level of staff resources
devoted to the GSP and,
if the evaluation finds it
necessary, an increase in the number of Commission
staff working on the GSP supervisory mechanisms as
well as an increased effort as regards adequate training
of such staff.

In conclusion, the Committee strongly rec-
2.13.
ommends that, while its above comments should be
taken into account when it comes to the practical
interpretation of the new GSP arrangements, the present
Commission proposal for a Council Regulation should
be adopted by the Council in its existing form within
short. It hopes that the Commission will seriously

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consider including in its proposed instrument the funda-
mental ILO Conventions on forced labour and on

discriminations, as well as the 1999 new ILO Convention
on Child labour in the foreseeable future.

Brussels, 10 December 1997.

The President

of the Economic and Social Committee

Tom JENKINS

Opinion of the Economic and Social Committee on the ‘Proposal for a Council Regulation
(EC) applying Article 6 of Council Regulations (EC) Nos 3281/94 and 1256/96 on multiannual
generalized tariff preferences schemes in respect of certain industrial and agricultural products
originating in developing countries, excluding the most advanced beneficiary countries from
entitlement to generalized tariff preferences’

(98/C 73/16)

On 14 November 1997, the Council consulted the Economic and Social Committee, in
pursuance of Article 198 of the EC Treaty, on the above-mentioned proposal.

The Section for External Relations, Trade and Development Policy, which was instructed to
prepare the Committee’s work on this subject, adopted its opinion, by a unanimous vote, on
25 November 1997. The rapporteur working without a study group was Mr Giesecke.

At its 350th plenary session held on 10 and 11 December 1997 (meeting of 10 December) the
Committee adopted the opinion set out below, with 119 votes in favour and 6 abstentions.

1.

Introduction

The generalized tariff preferences scheme (GSP)
1.1.
was radically revised in respect of
the 1994-1997
period (1). A key aim of the new multiannual scheme
was to secure a decisive improvement in the transparency
and predictability of
the GSP vis-à-vis the earlier
quota- and ceiling-based provisions. Transparency and
predictability are important to both suppliers and
administrations in the poorer developing countries
which seek to focus their export drives on transparent
markets. These factors are also in the interests of
importers in the EU Member States who must have
adequate incentives to establish new and stable sources
of supply.

(1) Cf: Proposal for a Council Regulation (EC) applying a
three-year scheme of generalized tariff preferences (1995-
1997) in respect of certain industrial products originating
in developing countries and the Proposal for a Council
Regulation (EC) extending into 1995 the application of
Regulations (EEC) No 3833/90, (EC) No 3835/90 and
No 3900/91 applying generalized tariff preferences in
respect of certain agricultural products originating in
developing countries. COM(94) 337 final.

A new possibility has been introduced whereby
1.2.
GSP benefits for developing countries can be tapered off
once they have attained a higher level of GNP and
exporting capacity. The overall volume of imports
subject
to preferential regimes should however be
maintained, in accordance with the principle of ‘global
neutrality’; i.e. the poorer developing countries should
benefit from savings in this respect.

Provision has also been made for special trade
1.3.
incentives — which have in the meantime been drawn
up — to promote good practice by individual developing
countries in respect of social provisions and environmen-
tal protection.

2. Commission proposal

The Commission proposes (2) that South Korea,
2.1.
Singapore and Hong Kong be withdrawn, on the basis
of objective and clearly-defined prosperity criteria, from
the list of countries benefiting from the GSP.

(2) COM(97) 533 final.