EU's New GSP Scheme to Take Effect January 1, 2009
European Union member states have adopted a new regulation applying the European Commission's (EC's) Generalized System of Preferences (GSP) for the period from January 1, 2009 until the end of 2011 for the benefit of certain developing countries.
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(Through its GSP program, the EU provides non-reciprocal preferential access to the EU market to 176 developing countries and territories. The current three-year phase of GSP is set to expire at the end of 2008.)
GSP Will Remain Broadly Unchanged, Some Adjustments Due to Trade Flows
The EC states that the new GSP scheme remains broadly unchanged, but does implement some technical changes, taking evolutions in trade flows into account. For example, as a result of re-calculations made on trade data for the period 2004-2006, GSP preferences will be reestablished for six country/product group combinations and suspended for one.
GSP Preferences Reestablished for Certain Country/Product Combinations
GSP preferences will be reestablished for the following beneficiary country/product group combinations (section number represents the EU Harmonized System section):
Algeria: Section V (mineral products);
India: Section XIV (jewelry, pearls, precious metals and stones);
Indonesia: Section IX (wood and articles of wood);
Russia: Section VI (products of the chemical or allied industries) and Section XV (base metals);
South Africa: Section XVII (transport equipment); and
Thailand: Section XVII (transport equipment).
Vietnam to Lose GSP Preferences for Footwear, Headgear, Umbrellas, Etc.
Preferences will be suspended for one country, Vietnam, for Section XII (footwear, headgear, umbrellas, sun umbrellas, artificial flowers, etc.).
Addition/Removal of GSP Benefits Automatically Triggered
The EC states that whenever an individual country's performance on the EU market over a three-year period exceeds or falls below a set threshold, preferential tariffs are either suspended or reestablished. According to the EC, these adjustments are triggered automatically and help ensure that the benefits of GSP preferences are targeted at the countries that need them most.
Early Liberalization of Sugar Imports from LDCs, Sugar Price Arrangement
A small adjustment is also being made in the liberalization timetable for sugar. In order to ensure coherence with the EU marketing year (which now begins on October 1st every year rather than July 1st) and the results of recent Economic Partnership Agreements (EPA)1 negotiations with Africa, the Caribbean and the Pacific (ACP) countries (many of which are also Least Developed Countries (LDCs)), full liberalization of sugar imports from LDCs will now take place on October 1, 2009 instead of July 1, 2009 as previously intended.
The new GSP also incorporates a minimum price arrangement for sugar, so as to ensure coherence with the results of EPA negotiations. This minimum price arrangement will apply from October 1, 2009 to September 30, 2012.
Myanmar, Belarus Remain Temporarily Withdrawn from GSP Preferences
Myanmar and Belarus will remain temporarily withdrawn from GSP preferences on the basis of previous EC regulations, as the reasons for their withdrawals still persist.
GSP Beneficiary Countries Will Have to Reapply
At present, 14 beneficiary countries have qualified to receive the additional preferences offered under the EU's GSP incentive arrangement. However, GSP lapses at the end of 2008, and any country wishing to receive such preferences after January 2009, will have to submit an application (and meet certain criteria) before October 31, 2008.
1In January 2008, the EC signed interim or full EPAs with 35 ACP countries to eliminate EU duties and quotas for all products (other than short transition periods for sugar and rice). The EPAs do not include waivers, time limits or periodic renewals and also require gradual trade liberalization in ACP countries, generally over 5 to 25 years. (See ITT's Online Archives or 01/30/08 news, 08013015, for BP summary of the EC signing these EPAs.)
(See ITT's Online Archives or 01/12/06 news, for BP summary of the EU's last GSP scheme.)
EC information on GSP 2009-2011 (MEMO/08/524, dated 07/23/08) available at http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/524&format=HTML&aged=0&language=EN&guiLanguage=en
EC press release (IP/08/1192, dated 07/23/08) available at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1192&format=HTML&aged=0&language=EN&guiLanguage=en