Source: EURLEX
Language: en
Format: md

No C 298/46 Official Journal of the European Communities 27. 11. 89

Opinion on the proposal from the Commission to the Council fixing the Community's
generalized tariff preferences scheme for 1990 ( [!] )

(89/C 298/12)

On 9 June 1989 the Council of the European Communities decided to consult the Economic
and Social Committee, on a voluntary basis, 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 15 September
1989. The rapporteur was Mr Cavazzuti.

At its 269th plenary session (meeting of 27 September 1989) the Economic and Social
Committee unanimously adopted the following Opinion.

1. The Committee has examined the Commission's

proposals concerning the application of generalized tariff preferences for 1990 and broadly agrees with them,
though it would make the following comments and
Recommendations.

2. The Committee appreciates that, as 1990 is the
last year in which the 1981-1990 scheme is applicable,
significant amendments are out of the question. The
Committee would nevertheless like to make certain

Recommendations, partly because otherwise it may give
the impression that it has had second thoughts about
the suggestions it has put forward in the past, and
partly because it hopes that even a brief reminder of
these suggestions could at last prompt some response
and at any rate lead to their incorporation into the
Commission's forthcoming proposal on the 1991-2000
generalized system of preferences (GSP) scheme.

3. The Committee reiterates its support for the GSP
as an effective instrument designed, in conjunction with
other measures, to promote development in less
developed countries (LDC).

4. However, the Committee is forced to note that

there are serious doubts as to the effectiveness of the

present system and fears that a successful outcome to
the Uruguay Round—which has the Committee's full
backing—could further weaken the impact of the GSP
on development in LDC.

5. As a corollary, the Committee would call for bold
changes in the new scheme: a concentrated and selective
approach is indispensible if the GSP is to produce
benefits commensurate with its cost and its negative
effects on the least-developed areas in the Community.
The Committee also reiterates that the GSP must be

simple, clear and precise.

6. In the Committee's view, all LDC should be able
to benefit under the GSP. It would particularly stress

(!) OJ No C 165, 3. 7. 1989, p. 1.

its own preference for a consistent approach, consisting
of separating (a) the poorest countries and (b) those
which are on the threshold of take-off, so as to be
able to concentrate—solely on these two groups of
countries—substantial efforts providing significantly
more assistance than is available under the GSP alone.

7. In this respect, the Committee would emphatically
renew its Recommendation that countries whose _per_
_capita_ GDP is higher than that of a Community country
or with a consistent balance of payments surplus should
immediately be excluded from the GSP. It notes that it
is impossible to quantify advantages and disadvantages
or to pinpoint all the potential beneficiaries under the
revised scheme.

8. There are problems involved in separating off
and identifying the poorest countries with a view to
providing them with more substantial and effective aid.
The Committee realizes that more than just a formal
response is called for but is convinced that this is the
right approach and therefore asks the Commission to
find the most appropriate legal forms for demarcation
of this new area.

9. The Committee once again endorses the system
of exclusions based on country/product assessments
but feels that, if the system is to be workable and
watertight, it might be necessary to tackle the problem
of defining newly industrializing countries (NIC) on the
basis of specific criteria.

10. The Committee takes note of the Court of Justice

judgment concerning the obligation to abolish national
quotas and to fix and use a Community quota, on a
product-by-product basis, to be binding on all Member
States. As stated in its Opinion on the GSP for 1989,
the Committee would have preferred to achieve this
objective in stages up until 1992, to avoid it having too
drastic an impact on the Community's most vulnerable

27. 11. 89 Official Journal of the European Communities No C 298/47

sectors and regions. As this is not possible, the Committee feels it might be appropriate to introduce a clause
allowing intervention in the case of largescale use of
the GSP (for a particular region of the Community, a
given category of product and/or over a short period
of time) because of the potentially serious consequences,
particularly for the Community's economically weaker
regions.

11. The Committee regrets that the Commission has
failed to heed the Recommendation made by the ESC
last year that certain products should not be transferred
from the sensitive list to the non-sensitive list (reference
nos 10.0810,10.0830,10.0870,10.1030,10.1200,10.1260
and 10.1268). It is pleased to note that products 10.0500
and 10.0920 have been retained on the sensitive list( [1] ).

12. The Committee has nothing to add to its previous comments and suggestions on these proposals
(particularly regarding cigars, figs and frozen strawberries). However, the Committee would reiterate its
hope that the GSP will act as an incentive for local
first-stage processing of raw materials (especially agricultural products—such as coffee) in these countries
since first-stage processing does not necessitate largescale investment or sophisticated technologies.

13. An overall assessment of the situation is impossible without data on the extent to which the scheme

was used in 1988 (a highly significant year in that it also
saw the introduction of new administrative criteria),
particularly in the case of the multifibre arrangement
(MFA) sector which, in the Commission's Opinion,
recorded a 'significant increase'. The Committee hopes
that the necessary data will be provided as soon as
possible so that it can obtain a clear idea of the situation.

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

Done at Brussels, 27 September 1989.

14. Turning to agricultural products, the Committee
would draw attention to the implications of the current
GATT talks in Geneva for the LDC: lower customs

duties and a reduction in the number of products subject
to quotas could reduce the advantages to be gained
from the GSP. It goes without saying that products
which have been 'liberalized' under the General Agreement on Tariffs and Trade (GATT) should be removed
from the GSP list and bound, without other compensation, under GATT rules, which are more firmly-based
than GSP rules, in that they are contractual and cannot
be unilaterally revoked.

15. In conclusion, the Committee would reiterate the
points made in previous ESC Opinions on the GSP
(particularly that of 29 September 1988) as regards:
automatic re-application of normal GATT rules once
tariff quotas and/or ceilings have been taken up; the
need to take every possible opportunity to encourage
the introduction of appropriate social policies in LDC,
on the basis of basic International Labour Organization
(ILO) conventions; the need to exclude from the GSP
any categories of product which are the subject of
dumping verification procedures, particularly as
regards the more vulnerable sectors of the chemical
industry.

16. The Committee insists that South Korea should

be excluded from the GSP on the grounds given in
paragraph 7 above. Whilst it does not deny that South
Korea's discrimination as regards protection of EEC
intellectual property is a cause of tension in EECSouth Korean relations and could therefore result in

retaliatory action, the Committee feels that it would be
preferable for the issue to be dealt with in the appropriate international bodies.

17. The Committee hopes that the Commission will
draw up its proposals for the 1991-2000 GSP framework
scheme as soon as possible, so as to have the necessary
time and facts at its disposal in order to deliver its
Opinion on the subject.

_The_ _Chairman_

_of the Economic and Social_ _Committee_

Alberto MASPRONE