Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee - Developing countries, international trade and sustainable development: the function of the Community's generalised system of preferences (GSP) for the ten-year period from 2006 to 2015
Date: 2004-07-07
Institutions: European Commission
Subjects: developing countries, generalised preferences, international trade, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 7.7.2004 
COM(2004) 461 final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE EUROPEAN 
ECONOMIC AND SOCIAL COMMITTEE 

Developing countries, international trade and sustainable development: the function of 
the Community’s generalised system of preferences (GSP) 
for the ten-year period from 2006 to 2015 

. 

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COMMUNICATION FROM THE COMMISSION  
TO THE COUNCIL, THE EUROPEAN PARLIAMENT AND THE EUROPEAN 
ECONOMIC AND SOCIAL COMMITTEE 

Developing countries, international trade and sustainable development: the function of 
the Community’s generalised system of preferences (GSP) 
for the ten-year period from 2006 to 2015 

TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

Introduction .................................................................................................................. 3 

Development in the international economy ................................................................. 4 

Review of the GSP ....................................................................................................... 4 

The GSP for 2006-15 ................................................................................................... 6 

The legal framework for the GSP ................................................................................ 7 

How to implement the GSP.......................................................................................... 7 

Conclusion.................................................................................................................. 12 

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Executive summary 

•  The Generalised System of Preferences (GSP) is one of the key instruments to assist 
developing countries to reduce poverty by helping them to generate revenue through 
international  trade.  This  communication  sets  out  guidelines  for  achieving  this 
objective under GSP schemes from 2006 to 2015.  

•  The  GSP  is  part  of  a  wider  set  of  priorities  for  the  Community’s  trade  policies.  In 
particular,  among  these  policies  are  the  priorities  laid  down  by  the  “Doha  Agenda” 
aimed at the developing countries. 

•  The GSP must be stable, predictable, objective and simple. The system must build on 
the experience gained from past schemes. It must be made more accessible to traders. 
The number of arrangements must be reduced from the current five.  

•  The  GSP  must  be  targeted  on  the  countries  that  most  need  it  and  must  encourage 
regional  cooperation  between  developing  countries  by  various  means.  The  GSP 
should  assist  these  countries  to  attain  a  level  of  competitiveness  which  could  make 
them self-supporting economically and full partners in international trade.  

•  The goal of promoting sustainable development must be given greater prominence, by 
means  of  a  single  system  of  additional  concessions  for  all  developing  countries’ 
special  development  needs  (“GSP+”)  that  accept  the  main  international  conventions 
relating to social rights, environmental protection and governance, including the fight 
against  drugs.  The  Community  will  withdraw  entitlement  to  such  additional 
preferences  whenever  the  evaluation  mechanisms  of  the  relevant  international 
organisations reveal serious systemic failings on the part of the beneficiary countries. 

1. 

INTRODUCTION 

There  is  agreement  in  the  international  community  that  trade  is  essential  for 
development.  Though  not  sufficient  by  itself,  greater  involvement  in  international 
trade by developing countries is nevertheless an important part of poverty reduction. 
The Declaration adopted by WTO Ministerial Conference on 14 November 2001 in 
Doha  acknowledged  that  international  trade  could  play  a  major  role  in  promoting 
economic development and reducing poverty.  

The very concept of development has been changing in recent years. The definition 
now goes far beyond just economic criteria. Development is now measured in terms 
of 
improved  social  conditions,  anti-corruption  measures, 
the  environment, 
governance and so on.  

The  various  GSP  schemes  granted  to  the  developing  countries  by  the  developed 
countries, with the Community foremost amongst them, must be compatible with the 
Doha Development Agenda. A key priority is to help developing countries to benefit 
from  globalisation,  in  particular  by  linking  trade  and  sustainable  development. 

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Lastly, development can also be promoted by South-South regional cooperation1.The 
GSP must, wherever possible, contribute to the achievement of these objectives. 

The purpose of this communication is to establish the main objectives of the GSP for 
the coming ten-year period (2006 to 2015) and the instruments to be used to achieve 
them in the shape of multi-annual implementing regulations, the first of which will 
enter into force on 1 January 2006.     

2. 

DEVELOPMENT IN THE INTERNATIONAL ECONOMY 

Efforts  to  promote  development  and  eradicate  poverty  must  be  stepped  up.  The 
continuing  expansion  of  international  trade  and  the  increasing  openness  of  both 
developing  and  developed  economies  both  enhance  the  effectiveness  of  external 
trade-policy instruments, such as the GSP.  

Furthermore, the right balance has to be struck between development through trade 
on the one hand and development through industrialisation on the other. The origin 
rules  must  reflect  that  balance.  The  big  cotton  debate  at  the  WTO  ministerial 
conference in Cancun in September 2003, revealed that certain African countries no 
longer wanted just to export cotton fibres with a low value-added, but wanted to start 
selling fabrics and clothes. This approach would tend to favour an industrial view of 
development,  with  origin  rules  requiring  a  high  level  of  vertical  integration.  At  the 
same time, certain Asian countries, specialising in labour-intensive industries, would 
like to be able to buy in semi-finished products so that they can make full use of the 
advantage that a generally lower level of wages gives them on international markets. 
Here, a trade-based approach to development, i.e. one that facilitates trade, would be 
more appropriate. For that, the rules of origin need to be less strict. Thus, origin rules 
should evolve in a balanced way that takes account of these different situations.  

3. 

REVIEW OF THE GSP 

Two  trends  can  be  discerned  from  the  most  recent  ten  years  for  which  full  GSP 
statistics are available (up to 2002).  

The first is that value of total imports into the Community doubled from €424 billion 
to €936 billion (fig. 1) while, over the same period, the volume of GSP imports rose 
from  €30  billion  to  €53 billion.  Furthermore  the  increase  in  GSP  imports  was 
uneven.  This  is  because,  in  line  with  tariff  agreements  concluded  at  WTO  level, 
customs duties were abolished for the output of entire industries. (For instance, the 
decision  was  taken  in  1996  to  abolish  customs  duties  for  electronic  products  and 
information  technology,  which  accounts  at  least  in  part  for  the  drop  in  preferential 
imports seen in Table 1 below for the years 1997-98.) So GSP coverage has varied 
over time, which creates difficulties for a quantitative assessment of the system. 

1  

Within  the  framework  of  the  GSP,  regional  cooperation  can  be  encouraged  through  rules  of  origin. 
Rules of origin are the backbone of any preferential arrangements for products from a given country. 
They are relaxed in relation to GSP through regional cumulation, which makes it possible to reach the 
required degree of local integration with components from neighbouring countries. 

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Table 1
GSP and Community Imports
€ billion

58

54

50

972

47

965

50

936
53

41

464

30

424

33

420

562

529

638

675
38

739

34

70

60

50

40

30

20

10

0

s
t
r
o
p
m

I

l
a
i
t
n
e
r
e
f
e
r
P

s
t
r
o
p
m

i

l
a
t
o
T

1.200

1.000

800

600

400

200

0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Tot. imps

Pref. imps

Secondly,  the  GSP  utilisation  rate2  has  fluctuated  (fig.  2),  also  in  a  rather  unsteady 
way. However, the last four years have seen a mild increase in the utilisation rate to 
52.5% in 2002.  

Table 2
GSP Utilisation rates

57,5%

54,8%

52,6%

47,7%

48,7%

50,3%

52,5%

43,4%

42,6%

70%

60%

50%

40%

30%

20%

10%

0%

1994

1995

1996

1997

1998

1999

2000

2001

2002

Utilisation rate

2  

Utilisation rate: the volume of imports actually enjoying tariff preferences as a proportion of the volume 
of trade eligible under the GSP. 

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4. 

THE GSP FOR 2006-15 

Although customs duties have steadily fallen to an all-time low, they are still an issue 
for some products. There are a number of industries where competition is becoming 
increasingly fierce and where a reduction in customs duties will provide an incentive 
for companies to buy from one country rather than another.  

Tariff  reductions  should  be  agreed  on  in  the  course  of  the  Doha  Development 
Agenda but in any case, GSP will continue to be a useful tool in favour of developing 
countries,  especially  the  Community  scheme.  Indeed,  our  GSP  is  by  far  the  most 
generous  and  the  broadest  of  any  offered  by  the  developed  countries3.  The 
Community’s GSP scheme will moreover consolidate this leading position over the 
coming years with the accession of the new Member States on 1 May 20044. 

5. 

THE LEGAL FRAMEWORK FOR THE GSP 

The GSP is an exception to the most-favoured nation principle under the GATT and 
it  must,  therefore,  comply  with  the  Enabling  Clause  as  interpreted  by  the  WTO 
Appellate Body in the recent case taken by India against the Community’s existing 
GSP scheme (and in particular the special “drugs regime”).  

The  Enabling  Clause  provides  that  a  GSP  scheme  shall  be  “generalized,  non-
reciprocal and non-discriminatory”. It needs to be designed to facilitate and promote 
trade of developing countries, and to respond positively to the development, financial 
and trade needs of developing countries.  

The  Appellate  Body  found  that  WTO  Members  are  in  principle  allowed  to  grant 
different  tariffs  to  products  originating  in  different  GSP  beneficiaries  under  the 
condition  that  identical  treatment  is  available  to  all  similarly-situated  GSP 
beneficiaries.    A WTO Member which intends to grant additional tariff preferences 
under  its  GSP  scheme  would  have  to  identify  on  an  objective  basis  the  special 
“development  needs”  of  developing  countries  which  can  be  effectively  addressed 
through tariff preferences.  

6. 

HOW TO IMPLEMENT THE GSP 

In accordance with the above, the GSP scheme for the ten year period from 2006 to 
2015 must pursue a number of objectives: 

3  

4  

The Community GSP covers 178 independent countries and territories. Of the just over 10 000 products 
in  the  Combined  Nomenclature,  7 000  processed  products  are  eligible  for  the  GSP,  including  the 
majority of industrial products and a great many agricultural and fish products. Half of all products are 
admitted  at  a  zero  rate  while  the  other,  more  sensitive  half,  are  granted  a  limited  reduction  of  3.5 
percentage  points  (MFN  tariff  minus  20%  for  textile  and  clothing  products).  Under  separate 
arrangements, the GSP grants a zero rate for all products (except arms) originating from the 49 LDCs 
(plus East Timor). 
In 2002, the volume of trade from developing countries covered by the GSP amounted to €53 billion, 
accounting for 5.6% of Community imports, against €16.4 billion for the US’s GSP, the second biggest, 
accounting for 1.4% of its imports.  

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6.1.  Maintain generous tariff rates 

Three factors tend to reduce the impact of the GSP offer5:(1) the reduction in MFN 
customs  duties6,which  automatically  lowers  the  average  preference  margin7;(2)  the 
international agreements concluded at WTO level aimed at abolishing customs duties 
on  a  certain  number  of  products  eligible for the GSP (see paragraph 3 above). The 
international  agreement  on  coffee,  dating  from  2001,  and  the  ITA  (Information 
Technology  Agreement)  adopted  in  1996  at  the  WTO  Ministerial  Conference  in 
Singapore, both led to the abolition of customs duties on a great number of products 
and thus a corresponding reduction in nominal GSP coverage, whilst totally opening 
to  them  the  Community  market;  and  (3)  the  increasing  number  of  bilateral  and 
regional free trade agreements.  

There  are  a  number  of  ways  of  maintaining  and  improving  the  Community  offer. 
First of all, the offer was improved substantially by the accession to the Community 
of  ten  new  Member  States  on  1  May  2004.  But  we  should  also  consider  extending 
the  GSP  to  cover  new  products.  Almost  one  tenth  of  dutiable  products  in  the 
Common  Customs  Tariff  are  not  covered  by  the  GSP.  Certain  products  currently 
classed  as  sensitive  could  be  transferred  to  the  non-sensitive  category,  given  the 
changing definition of sensitivity (see paragraph 2 above). 

Preferential margins (currently 3.5 percentage points for sensitive products and 100% 
for non-sensitive products) will be at least maintained  

The Commission will continue to take into account the impact of these measures on 
outermost regions.  

6.2. 

Target the GSP on the countries that most need it 

Given the wide geographic coverage of the Community’s GSP scheme, it has a high 
Community budgetary cost. Accordingly, in the future, the GSP should focus on the 
countries  most  in  need,  such  as  the  LDCs  and  the  most  vulnerable  developing 
countries  (small  economies,  land-locked  countries,  small  island  states,  and  low 
income  countries)  in  order  to  help  them  play  a  greater  role  in  international  trade. 
These  are  the  countries  that  the  GSP  must  focus  on  as  its  first  priority.  One 
appropriate method to manage priorities is undoubtedly via graduation8. In particular, 
we  have  to  graduate  the  most  competitive  groups  of  products  from  certain 
beneficiaries.  Given  this  high  level  of  competitiveness,  there  is  no  further 
justification  for  these  products  to  continue  to  benefit  from  a  preferential  tariff 
treatment for these countries. However, special consideration should be given to the 
countries most in need in designing the graduation mechanism.  

 So  on  which  countries  should  we  try  to  focus  the  benefits  in  particular?  Most 
obviously,  on  the  LDCs  to  which  preferences  should  be  granted  as  widely  as 
possible.  Measures  should  also  be  adopted  that  provide  some  way  of  damping  the 

5  

6  

7  
8  

The GSP offer: tariff preferences for GSP beneficiaries. In 2002, the effective GSP offer was valued at 
€2.2 billion in terms of uncollected customs duties.  
MFN  duties:  the  duties  which  the  Community  applies  to  non-member  countries,  not  counting  tariff 
preferences such as the GSP.  
Preference margin: the difference between the MFN rate of duty and the GSP preferential rate.  
Graduation: withdrawal of the GSP for certain products (for one or several countries of origin only).  

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shock when the United Nations removes a country from the list of LDCs. At present, 
when  this  happens,  the  country  in  question  automatically  loses  all  the  GSP 
advantages  it  enjoyed  as  an  LDC.  There  ought  to  be  a  mechanism  for  gradual 
withdrawal  of  a  country  from 
the  Everything-But-Arms 
arrangement9. 

the  special  GSP, 

In addition, a further obvious group of countries are the land-locked and low income 
countries,  countries  that  are  unable  to  take  advantage  of  economies  of  scale  or  are 
beset  by  logistical  problems  and  those  whose  economies  are  not  at  all  diversified. 
This  goes  in  particular  for  the  textiles  and  clothing  industry.  In  October  2003,  a 
Commission  Communication10  stressed  the  need  to  target  preferences  on  the 
countries that would need them most when the MFA textile-quota system came to an 
end in December 2004.  

6.3. 

Propose a simpler GSP with easier access 

There  should  be  greater  emphasis  on  simplification.  The  current  GSP  has  already 
been greatly simplified. Simplification should also be achieved through a reduction 
in the number of arrangements, of which there are five at present11  and in particular 
by  the  introduction  of  a  single  arrangement  in  place  of  the  three  separate  types  of 
special  incentives:  to  encourage  the  protection  of  labour  rights,  to  encourage 
protection of the environment and to combat illegal drug production and trafficking. 
Thus,  in  place  of  the  current  five,  there  would  be  three  arrangements  in  total:  the 
general  arrangement,  the  special  arrangement  for  the  least  developed  countries  and 
an  arrangement  to  encourage  sustainable  development.  Simplification  should  also 
involve  removing  from  the  list  of  beneficiaries,  those  countries  that  enjoy 
preferential  access  to  the  Community  market  under  the  terms  of  an  agreement, 
usually a free-trade agreement.    However, the Community would of course ensure 
that no country would lose as a result of this because GSP benefits for any particular 
product which formerly received GSP treatment should be consolidated into the FTA 
in question. A concerted effort must also be made with regard to rules of origin, in 
the light of the debate triggered by the Commission’s Green Paper on the future of 
rules of origin in preferential trade agreements12.Lastly, the GSP Regulation should 
enter into force as soon as possible to enable traders to plan ahead.  

6.4.  Make graduation more transparent and target it on the prime beneficiaries 

Graduation must be applied to groups of products from countries that are competitive 
on  the  Community  market  and  no  longer  need  the  GSP  to  boost  their  exports. 
Graduation is not a penalty, it is a sign that the GSP has successfully performed its 

9  

10  

11  

12  

This  is  the  most  advantageous  of  all  GSP  arrangements.  A  zero  rate  is  charged  on  the  10 000  or  so 
products in the Combined Nomenclature (excluding arms), with no exceptions for sensitive products.  
Communication  from  the  Commission  to  the  Council,  Parliament  and  the  Economic  and  Social 
Committee on the future of the textiles and clothing sector in the enlarged European Union, COM 2003 
(649) final, 29 October 2003. 
The basic GSP (the 7000 sensitive and non-sensitive products), the EBA arrangement for the LDCs, the 
two special social and environmental arrangements that grant additional preference to sensitive products 
from eligible countries (Moldova and Sri Lanka under the current GSP) and the arrangement aimed at 
reducing  illegal  drug  production  and  trafficking,  which  is  comparable  to  the  EBA  arrangement,  with 
twelve beneficiaries. 
COM (2003) 787 of 18 December 2003.  

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function,  at  least  in  relation  to  the  countries  and  products  in  question.  Thus 
graduation is very closely linked to the economic competitiveness of the beneficiary 
countries.  

Graduation  gives  the  countries  to  which  it  is  applied  an  incentive  to  do  more  to 
diversify  their  economies.  For  the  other  beneficiary  countries,  it  means  a  greater 
share  of  the  benefits  of  GSP.  Graduation  should  also  play  an  important  role  in 
regulating  trade  flows  for  textile  products  and  clothing,  following  the  abolition  of 
MFA quotas on 31 December 2004.  

Essential  changes  will  be  made  to  the  graduation  arrangements  to  make  them 
simpler.  The  current  criteria  (share  of  preferential  imports,  development  index  and 
export-specialisation index) will be replaced with a single straightforward criterion: 
share of the Community market, expressed as a share of preferential imports. Goods 
will  no  longer  be  broken  down  into  “sectors”,  as  before  for  the  purposes  of 
graduation13.Groups of products will be defined by reference to the “sections” in the 
Combined  Nomenclature14.As  well  as  being  simple,  this  system  has  the  advantage 
that it would graduate only groups of products from the biggest beneficiaries15.Only 
the  countries  that  were,  on  average,  competitive  for  all  the  products  in  a  section 
would be graduated for these groups of products. Small beneficiaries, competitive for 
just a few products, or group of products would under no circumstances be graduated 
solely on the basis of those few products.  

6.5. 

Devise new incentives to encourage sustainable development and governance 

As already made clear, a number of developing countries face particular problems in 
the  globalised  economy,  such  as  the  fight  against  drugs  (to  which  the  Community 
remains  committed  through  a  policy  based  on  shared  responsibility),  or  inadequate 
diversification  of  their  economies.  In  accordance  with  the  objective  to  concentrate 
the  GSP  on  such  countries  that  are  most  in  need,  the  new  GSP  scheme  should 
provide for special incentives that respond positively to special development needs in 
a manner consistent with the Enabling Clause. These additional preferences would be 
open to all developing countries which face the same development needs.  

The  two  special  arrangements  to  encourage  protection  of  basic  workers’  rights  and 
protection  of  the  environment  (the  “social”  and  “environmental”  clauses)  are  little 
used in their current form. Some beneficiary countries have preferred not to have the 
content  and  implementation  of  their  social  legislation  subjected  to  the  rigours  of 
scrutiny.  The  length  and  relative  complexity  of  the  evaluation  procedures  have 
probably  made 
less  attractive.  The  environmental 
arrangement  takes  an  extremely  limited  approach  to  environmental  protection;  it 
applies  only  to  tropical  timber.  And  on  the  special  arrangement  to  combat  illegal 
drug production and trafficking, the Appellate Body criticized the lack of objective 
criteria for the inclusion or removal of beneficiary countries.  

the  arrangements  even 

13  
14  

15  

The 7 000 products covered by the GSP are grouped into 34 sectors. 
The  Combined  Nomenclature  is  the  Community’s  subdivision  of  the  Harmonised  System,  the 
international customs nomenclature adopted by the World Customs Organisation and used for 95% of 
international  trade.  Both  nomenclatures  are  divided  into  21  sections  (for  instance,  section  11  covers 
fabrics and clothing). 
Fewer than ten of the 178 countries and territories covered by the GSP.  

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Therefore it is appropriate to move to a broader concept of sustainable development 
international  conventions  and  declarations  have 
and  governance.  Multiple 
acknowledged  the  link  between  development  and  the  respect  of  basic  human  and 
labour rights, of the environment, and of the principles of governance. The failure to 
honour  these  basic  standards,  which  are  specified  in  various  international 
conventions,  entails  particular  problems  for  developing  countries.  It  is  therefore 
appropriate  to  address  these  special  development  needs  positively  through  granting 
additional GSP preferences to those developing countries which have taken on board 
the major international conventions in these areas.     

The  new  sustainable-development  incentive  will  replace  prior  evaluations,  carried 
out  under  the  current  incentive  arrangements,  with  a  system  that  will  encourage 
ratification  and  implementation  of  international  conventions.  The  scheme  will  be 
granted to beneficiaries who have taken on board the relevant international standards 
relating  to  sustainable  development,  including  basic  human  rights  conventions 
(agreements  designed  to  uphold  political  and  economic  and  social  rights,  combat 
torture and discrimination on grounds of race and gender, and protect women’s and 
children’s  rights),  labour  rights  conventions  and  certain  conventions  relating  to 
environmental  protection  (e.g.  conventions  designed  to  combat  trafficking  in 
endangered  species  and  to  protect  the  ozone  layer),  as  well  as  the  various 
conventions  relating  to  the  fight  against  illegal  drugs  production  and  trafficking, 
which is of course an important development policy (see above).  

The  relevant  conventions  are  those  with  mechanisms  that  the  relevant  international 
organisations  can  use  to  regularly  evaluate  how  effectively  they  have  been 
implemented.  The  Commission  will  take  account  of  these  evaluations  before 
deciding  which  of  the  applicant  countries  will  be  selected  to  benefit  from  the 
incentive schemes. To be considered, potential beneficiaries will have to submit an 
official  application  containing  essential  information  in  support  of  the  application. 
Applications  could  be  submitted  from  the  first  day  the  new  GSP  Regulation  is 
adopted  by  the  Council  to  enable  those  countries  who  will  qualify  under  the  new 
objective criteria in line with development needs to obtain those benefits as soon as 
possible. The incentive scheme will include a credible suspension clause that can be 
rapidly  activated.  In  the  event  of  a  serious  breach  of  international  agreements,  the 
decision to withdraw the regime could be invoked by the Commission, the Member 
States  or  the  European  Parliament.  This  would  trigger  an  investigation  by  the 
Commission  which  could  lead  to  suspension  of  the  additional  benefits  if  it  is 
established that countries have not honoured their commitments.  

6.6. 

Improving rules of origin 

The rules of origin lay down the main criteria for access to preferences but they were 
drawn up at a time when the international economy was very different from that of 
today and when goods were produced in a very different way. In the light of recent 
consideration of this question (see the Green Paper referred to at point 6.3), the need 
for change is widely recognised: in form (simplification), in substance (amendment 
of  the  origin  criteria  and  cumulation  rules)  and  in  procedures  (formalities  and 
controls).  

A need has been identified for flexibility. However, this must be done in a way that 
promotes  not  just  trade  but  also  development.  One  of  the  objectives  must  be  to 

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facilitate acquisition of origin to better benefit from preferences. The benefits of the 
system could be enhanced through regional cumulation, thus promoting the regional 
cooperation  between  the  beneficiary  countries.  The  Commission  has  stressed  the 
importance  of  regional  integration  for  southern  countries  as  a  route  to  greater 
involvement  in  international  trade16.This  cooperation  element  was  introduced  into 
the  GSP  two  decades  ago  when  it  was  decided  that  a  more  regionalised  approach 
should  be  taken  towards  development  with  the  creation  of  regional  cumulation 
(ASEAN, Andean and Central America and SAARC). Further consideration needs to 
be  given  to  the  possibility  of  cross-regional  cumulation,  based  on  requests  coming 
from the different regional groupings. In this respect facilitation of cumulation could 
be envisaged through a proper revision of the conditions required today.  

6.7. 

Reinforce the temporary withdrawal instruments, safeguard measures and anti-
fraud measures 

The  new  GSP  with  a  graduation  mechanism  targeted  on  the  most  competitive 
countries will mean that most beneficiaries will be granted preferences without any 
restrictions other than compliance with the relevant GSP rules. The GSP temporary 
withdrawal provisions and the safeguard clause will be redefined to take account of 
this new situation. Even though they will still be for use in exceptional circumstances 
only, those provisions must be made more credible, which will involve simplifying 
them and making the way they are used more flexible, in particular in case of unfair 
trading practices.  

the  anti-fraud  measures  and  measures 

Generally  speaking, 
the 
Community’s  financial  interests  within  the  GSP  framework  already  enjoy  a  high 
degree  of  credibility.  The  Commission  wishes  to  maintain  this  but  thinks  that  they 
can  be  truly  effective  only  if  the  Commission  (and  the  Member  states  who  are 
responsible  for  administering  the  GSP),  have  enough  political  will  and  the 
determination to apply them systematically when the situation calls for it.  

to  protect 

The beneficiary countries should also have responsibilities in managing the GSP, in 
everyone’s  interest,  including  their  own.  They  must  take  the  necessary  control 
measures such as ensuring that the effective and appropriate administrative structures 
are  available  to  ascertain  the  validity  of  the  origin  documents  when  they  are 
established and released.  

7. 

CONCLUSION 

The Commission will put the draft multi-annual regulations designed to achieve the 
objectives set out in this communication to the Council. It will make every effort to 
present  the  proposals  early  so  that  the  Council  can  adopt  them  in  time  to  enable 
beneficiaries  and  traders  time  to  organise  trade  flows.  This  measure  will  provide 
greater  continuity  (with  the  end  of  the  annual  graduation  review)  and  stabilise  the 
GSP, thereby making it more attractive.  

16  

Communication  from  the  Commission  to  the  Council  and  the  European  Parliament  on  Trade  and 
Development  Assisting  Developing  Countries  to  Benefit  from  Trade  COM  (2002)  513  final  of 
18.09.02.  

EN 

11 

   EN 

 
                                                 
The revised GSP is proposed to last for ten years until 2015. But on past experience, 
an  evaluation  of  the  detailed  GSP  rules  should  be  carried  out  on  a  regular  basis, 
preferably every three years as at present, and improvements considered as necessary 
–  for  example,  in  the  light  of  the  outcome  of  multilateral  negotiations,  such  as  the 
Doha Development Agenda.  

Accordingly, a new GSP Regulation to apply for three years will be presented to the 
Council,  European  Parliament,  and  European  Economic  and  Social  Committee  in 
autumn 2004 and should enter into force on 1 January 2006.  

EN 

12 

   EN