Source: EURLEX
Language: en
Format: md

12. 12. 88 Official Journal of the European Communities No C 318/21

Opinion on the proposal for a Council Regulation applying generalized tariff preferences for

1989

(88/C 318/09)

On 31 May 1988, the Economic and Social Committee decided, in accordance with Article
20 (4) of its rules of procedure, to draw up an Opinion on the abovementioned 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 16 September 1988.
The rapporteur was Mr Gavazzutti.

At its 258th plenary session (meeting of 29 September 1988) the Economic and Social
Committee adopted the following Opinion by a majority in favour, with three votes against.

1. The Committee reiterates its full support for the
scheme, which helps promote balanced growth in developing countries.

2. It is imperative that the generalized system of
preferences (GSP), or any other form of aid to developing countries, and all bilateral or multilateral EEC
agreements, adhere to rules of the General Agreement
on Tariffs and Trade (GATT) and reflect the position
taken by the EEC delegation at the current Uruguay
round talks in Geneva.

3. A coherent and comprehensive system of Community aid to development, of which the GSP would
have to be an integral part, should be geared primarily
to:

— the poorest developing countries,

—- developing countries whose economies have reached
take-off, i.e. countries which, with a regular flow
of aid for industrial and agricultural development
and a new international division of labour, could
rapidly acquire majority status and become full
members of the international trading community
governed by GATT.

4. The introduction of differentiated criteria in the
application of the GSP, and in particular the exclusion
of some products and countries, is a first, positive step
in this direction, although it falls short of the dual
objective outlined above.

5. Aid schemes should therefore be concentrated, to
guarantee effectiveness; dependable; transparent; objective, i.e. based on up-to-date and reliable data; simple
to understand and apply.

6. Despite the fact that its shortcomings are becoming increasingly apparent (the Commission admits as
much in the explanatory memorandum), the present

GSP is unlikely to be replaced before 1990, inter alia
because the latest round of GATT talks in Geneva will
probably result in further tariff reductions.

7. The current aim is to revamp (or replace) the
present scheme when it expires in 1990, in the light of
the completion of the internal market by 1992.

8. It is hoped that the review will be carried out as
soon as possible and that the Committee will be invited
to take part in the preparatory work.

9. Turning to the more detailed aspects of the present
scheme, the Committee notes that the application of
differentiated country/product criteria has failed to
exclude certain very competitive countries which are
more highly developed overall than some EEC countries
and regions.

10. Other criteria should therefore be introduced to
determine whether to exclude a country from the GSP,
e.g. higher per capita GDP than an EEC Member State,
possibly combined with other general considerations,
such as a constant surplus on external accounts.

11. In any event, the proposed transfer of products
with reference numbers 10.0500, 10.0810, 10.0830,
10.0870, 10.0920, 10.1030, 10.1200, 10.1260 and
10.1268 (*) to the list of non-sensitive products is unacceptable because it affects ailing sectors of Community
industry. In addition, product no. 4410 (fibreboard)
should be transferred from the list of non-sensitive to
sensitive products, in anticipation of the application of
the steps requested in point 14 below.

(') 1. 10.0500 New pneumatic tyres and inner tubes; 2. 10.0810
Iron or steel bars; 3. 10.0830 Flat-rolled products of iron or
non-alloy steel (2%); 4. 10.0870 Iron cables, cords;
5. 10.0920 Copper bars; 6. 10.1030 Electric motors and generators (2%); 7. 10.1200 Watch cases; 8. 10.1260 Other furniture; 9. 10.1268 Prefabricated buildings of wood.

No C 318/22 Official Journal of the European Communities 12. 12. 88

12. The Committee agrees that the reference base
for re-establishing customs duties on given industrial
products could be raised from 5 % to 6 % of the total
value of Community imports of the relevant product in
1987. The Committee is however opposed to doubling
the reference base from 1 % to 2 % for products of
ailing sectors which are an exception to the rule.

13. The Committee is wary of allowing the currencies of many countries to fluctuate against the ECU.
This could lead to sudden, uncontrolled influxes of
zero-rated imports. In some cases (chemical, iron and
steel and other ailing sectors) it might be better to
limit the quantity, rather than the value, of products
imported under the GSP. Whilst it appreciates the difficulties and implications involved, the Committee feels
that every possible means of achieving this should be
explored, perhaps on a limited trial basis to start with.

14. The Committee believes that dumping, particularly of chemical products, is widespread, and reiterates
the need for prompter verification. Once the official
verification procedure has been initiated, eligibility for
GSP treatment should automatically and immediately
be withdrawn from the product/country in question,
as has been advocated in the past.

15. Normal GATT tariffs should be automatically
reintroduced for imports in excess of tariff ceilings and/
or quotas, to prevent any ambiguities or misunderstandings from arising.

16. The Committee is regrettably forced to conclude
that exclusion from the GSP is the only possible course
of action in the case of South Korea, in view of its
discrimination in the field of intellectual property. The
fact that this dispute cannot be settled within the GATT

Done at Brussels, 29 September 1988.

is both surprising and disappointing; the Committee
would urge the Commission to raise the matter during
the current round of GATT talks so that this serious
irregularity can be dealt with.

17. The Committee would renew its call that the
Community, when establishing economic ties with
developing countries, actively promote social progress
by requiring the countries in question to respect fundamental human rights and the basic social rights
enshrined in the main conventions of the International
Labour Organization (ILO). Instead of continuing to
offer GSP facilities to countries which systematically
oppose any social or civic progress, or which are
involved in protracted wars, it might make more sense
to suspend the GSP, in line with actions taken by other
countries.

18. The Committee supports the Commission's aim
of gradually switching to the Community quota system
for all products, but feels that this can only be
accomplished by computerizing and standardizing to a
large degree the internal and external mechanisms of
customs services.

19. A quota system could result in the Community
being inundated by imports (in terms of time, space and
category of product), ultimately triggering commercial
practices designed to make use of every available means
to keep competing products out of the market. Arrangements should be made for preventive measures to be
included in GSP rules, e.g. an immediate freeze on
imports, followed by a reduction in quotas.

20. Finally, firm action should be taken against
countries pursuing aggressive export policies as these
are detrimental to other developing countries' production and exports. This could culminate in the withdrawal of GSP treatment, as such practices are
accompanied by dumping and, without exception, by
unacceptable labour and wage policies.

_The Chairman_

_of the Economic and Social Committee_

Alfons MARGOT