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'
Date: 1997-12-10
Institutions: European Economic and Social Committee
Subjects: agricultural product, developing countries, generalised preferences, industrial product, originating product

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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.

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2.2.
In the Financial Statement set out at the end of
the draft Regulation, the expected customs gains in 1997
are estimated at ECU 40,3 million; this amount should
in future be made available to the poorer developing
countries.

3.4.
The ESC also welcomes the application of the
principle of neutrality as provided for in the financial
statement. The ESC urges that the volume of aid released
in this way should be allocated to poorer developing
countries as soon as possible.

2.3.
Exclusion of the three countries from the GSP
losing the benefits of the regional
will not entail
cumulation mechanism relating to the origin of products.

2.4.
The new system of incentives to promote particu-
larly good practice as regards social provisions and
environmental protection comes into force on 1 January
1998.

3. Comments by the ESC

In its opinion of 20 October 1994 (1) the ESC
3.1.
broadly welcomed the fundamental review of the GSP.
The ESC strongly urged that the overall procedures be
considerably simplified. It took the view that such a step
would be just as much in the interest of the poorer
developing countries as of EU importers.

3.2.
In view of the fact that the ESC had also called
for priority to assisting particularly poor developing
countries,
the three
it welcomes the exclusion of
countries in question. A number of particularly competi-
tive categories of products were excluded from the GSP
since 1996 (see Appendix).

3.3.
The ESC draws attention to the absence of
transitional provisions under Article 20 of Council
Regulation (EC) No 3281/94 in respect of ‘goods afloat’.

3.5.
The ESC also welcomes the Commission pro-
posal that the regional cumulation mechanism in respect
of the origin of products should not be affected by the
removal of states from the GSP; Singapore in particular,
participates in this mechanism within the framework of
ASEAN. The Commission’s proposal in this respect will
mean that industrial cooperation between these states is
not disrupted. A number of derogations to the rules
governing the origin of products which have come into
force recently in respect of some developing countries
in southern and south-east Asia have already somewhat
impaired the transparency of the system as a whole.

3.6.
The ESC has already welcomed the special
arrangements to promote particularly positive action in
respect of social provisions and environmental protec-
tion, but it has also drawn attention to the problems
which could arise in this context (2). The ESC reiterates
its view that this promising idea will only be effective if
it does not make the whole system less transparent and
predictable, which could very easily happen.

The ESC has noted with interest that the revised
3.7.
GSP has brought about higher levels of transparency
and predictability, with a beneficial impact both as
regards exporters and administrations in the developing
countries and as regards EU importers. The ESC is
concerned that the transparency and predictability of
the whole scheme could be jeopardized and it asks the
Commission to consider these aspects very carefully,
when deciding on the matter; it also urges the Com-
mission to monitor the impact of these measures and to
include the ESC amongst the recipients of its annual
reports.

(2) See point 9 of the opinion of 20.10.1994, OJ C 397,

(1) OJ C 397, 31.12.1994.

31.12.1994.

Brussels, 10 December 1997.

The President

of the Economic and Social Committee

Tom JENKINS

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APPENDIX

to the opinion of the Economic and Social Committee

Sectors excluded from the GSP with effect from 1 January 1996 (1)

State

Category of goods

• South Korea

• Hong Kong

Chapters 39 and 40 (plastics and rubber)
Chapters 42 and 43 (leather goods and fur-skins)
Chapters 50 to 60 (woven fabrics)
Chapters 61 to 63 (clothing)
Chapters 64 to 67 (footwear)
Various products listed under Chapters 72 and 73 (ECSC products)
Chapters 84 and 85 (machinery and electrical goods)
Chapter 87 (motor vehicles)
Chapters 94 to 96 (miscellaneous goods)

Chapters 42 and 43 (leather goods and fur-skins)
Chapters 61 to 63 (clothing)
Chapters 71 (jewellery and precious metals)
Various products listed under Chapters 84 and 85 (consumer electrical
goods)
Chapters 90 to 92 (optical equipment and clocks and watches)
Chapters 94 to 96 (miscellaneous goods)

• Singapore

Chapters 84 and 85 (machinery, electrical goods)

(1) Article 4(2), Article 5(3) in connection with Appendix II, Part 1 of Council Regulation (EC) No 3281/94, 19.12.1994,

OJ L 348, 31.12.1994.

Sectors excluded from the GSP with effect from 1 January 1997 (1)

State

Products

• South Korea

• Hong Kong

• Singapore

—

—

—

(1) Communication from the Commission (96/C 353/05) on the amendment of Council Regulation (EC) No 3281/94,

OJ C 353, 23.11.1996.