Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-06-12-Speech-2-204"
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"en.20010612.11.2-204"2
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Mr President, the Commission has just – and when I say ‘just’, I mean only ten minutes ago – approved the proposal for a generalised system of preferences for 2002-2004 and has also decided to refer this to Parliament. I am therefore happy to be able to comment on the proposal briefly and to place it in the double context of the common commercial policy on the one hand and the European Union’s strategy on sustainable development and the combating of poverty on the other. The generalised Community’s system of preferences (GSP) actually lies at the intersection between these two major policies of the Union.
The second arrangements are for the least developed countries, which were radically improved by the ‘Everything But Arms’ initiative. They are not affected by this proposal.
The third arrangements relate to social and environmental incentives, such as allocating additional tariff reductions to those countries which effectively implement the framework conventions of the International Labour Organisation and which undertake to ensure that there is sustainable management of tropical rainforests. These additional tariff reductions have been strengthened, in the Commission’s proposal, in order to correct their current weakness. We have done this, in our proposal, by doubling the preference margin in line with social and environmental commitments.
The fourth and last arrangements are the ‘drugs’ arrangements for the countries of the Andean Pact and the countries of Central America. These arrangements have been maintained and extended for a significant period of three years, until 2004. They deserve your special attention because they fit in with the Union’s great ambition with regard to Latin America and, to some extent, the privileged alliance which links us to that continent, but also because the arrangements are the Union’s main contribution to the fight against drugs, in which these countries are both the scene of operations and the protagonists. In my view, we should regard the drugs phenomenon in these countries as a symptom, rather than the cause, of the poor level of development that is endemic to this region.
The ‘drugs’ arrangements are very generous, very similar to the EBA initiative, because they consist in granting access to the Community market, at a ‘zero’ rate of tariff, for the most important industrial and agricultural products of these middle-income countries. When I say ‘middle-income’ I mean with a per capita GDP, at current rates of exchange, of about USD 1 100 for Bolivia, and USD 4 600 for Venezuela, in other words well above the USD 700 per head in the least developed countries.
The primary objective of the ‘drugs’ arrangements is not to directly replace illegal coca crops, but to promote development for its own sake, to create jobs and to diversify industrial and agricultural production, an area in which these countries are falling behind to an extent which gives rise for concern and which is, in our opinion, one of the factors that encourages the expansion of the production and trafficking of drugs.
We would expect these countries to respond to the special access that we are offering them to the European market by promoting – and in particular European – direct investment, tackling corruption and battling for social justice.
What we want these countries to do is to make more use of our GSP arrangements, while implementing more effective sustainable development strategies that address the root causes of the economic problems, and drugs and violence. This is the concept of sustainable development, which hinges on job-creating growth, social progress – entailing the effective implementation of ILO framework conventions – and environmental protection, including the sustainable management of the tropical rainforest which is a crucial aspect in this region.
We are therefore proposing to our Andean partners the very close monitoring of their efforts with regard to the diversification of their exports, the anti-drugs campaign and the promotion of these social and environmental aspects.
Some people are already somewhat alarmed by this parallel which the Commission is drawing between the generosity of the ‘drugs’ arrangements and the concern to evaluate the economic, social and environmental performance of our partner countries. We must remember that it would be difficult, otherwise, to justify the special nature of the arrangements that specifically apply to Latin America, to which we are linked by a political and economic partnership that is very ambitious compared with our relationship with other countries, and Asian countries in particular, which have a comparable level of development and are also facing the task of combating drugs but do not benefit from the ‘drugs’ arrangements. The only way that we can justify this difference is by subjecting these exceptional tariff preferences to standards of implementation that are acceptable to just those countries sharing our European values on sustainable development.
We believe that, as well as being good things in their own right, the encouraging of sound policies, the monitoring that is carried out by the Commission and the resulting dialogue with each country are also the counter-concession which allows the ‘drugs’ arrangements to escape being called into question, even by a WTO panel, on the grounds that it creates unjustified discrimination between countries benefiting from the Community GSP.
Those of you who are familiar with this subject know that the GSP is exclusively a tariff instrument which was created about thirty years ago, following an initiative by the European Community of the time within UNCTAD, the object of which was to reduce customs duties on industrial exports from developing countries, since its principal raison d’être was the industrialisation of the third world. At the time, high rates of duty were the main obstacle to trade. Of course, things have since changed to some extent, because the average level of duty has gone down. On the other hand, the non-tariff barriers have grown in relative importance, and we are trying to deal with this question in relation to non-tariff barriers by giving a certain number of countries the financial resources to enable them to improve their institutional capacity and by concluding ad hoc technical agreements with them, such as mutual recognition agreements or agreements on veterinary or plant-health matters.
This monitoring is not, therefore, an abusive or offensive intrusion into the internal affairs of these countries. On the contrary, in our view it is a kind of lightning conductor to deflect any complaints to the WTO by other developing countries.
We expect that at Doha our Latin American partners will be working in close cooperation with us in order to push ahead with the bilateral liberalisation and standardisation which should consolidate, rather than threaten, the ‘drugs’ GSP arrangements which are specific to the Andean Pact and Central America.
Mr President, ladies and gentlemen, following the EBA initiative, this proposal on the new Community GSP, which we are putting forward on the eve of Doha, confirms the priority which the Union intends to give, via the new round, to the integration of developing countries into the world economy, with the aim of achieving a fairer and more sustainable development, and the Commission needs your support in order to achieve this ambitious undertaking.
However, we must not forget that some tariff barriers are still important, even now. I shall quote a few examples. In the textile and agriculture sectors, developing countries often have comparatively large advantages, and there we are retaining tariff protection. In the primary processing sector we still have the combination of zero duty on imported raw materials and significant rates of duty on processed products, those rates corresponding to the degree to which those raw materials have been used. This is known as tariff escalation, and quite rightly, because this method of calculating our tariffs has the effect of discouraging processing on the spot in the country of origin. Then we also have certain tariff peaks which, despite the fact that we have made them less extreme – to a greater extent than they have done in the United States, for example – are still significant in some cases.
What the Commission is proposing, then, is the updating of the GSP in order to respond to three concerns. First, there is the question of compensating for the erosion in preferential tariff margins which involves lowering the average tariff levels. Then there is the need to simplify the system for tariff modulation, according to how sensitive the products are. We have got rid of some categories. There were four categories before, whereas now there are only two. It is more simple, less complicated. It will make the work of operators and customs officers easier and will thus make it possible to raise the GSP take-up rate.
The third concern is that we need to carry out a graduation process, in other words to deal with cases in which we are withdrawing the benefits of the GSP from countries with a high GDP, for products in which their competitiveness has been demonstrated by the relative level of their share of the market.
We believe that, in these circumstances, these countries can do without the GSP for those products, in which case ‘graduation’ offers new prospects for exports from other, less competitive developing countries, thus giving them a potential advantage in terms of development and the struggle against poverty.
We have carried out this updating of the GSP in order to try to find a balance between, on the one hand, the need to give a new, positive signal to the developing countries, to show them that we are determined to meet their expectations with regard to access to the market – this is a result of the ‘Everything But Arms’ initiative (EBA), hence the idea of recreating the preferential margins – and, on the other hand, the tactical ploy of retaining, with a view to the multilateral tariff-negotiations round, opportunities for additional access to the market.
I am sure we all agree that the developing countries generally, and rightly, acknowledge the special value of a concession which is given in a multilateral context, compared with a unilateral preference. The former is certain and stable, while the latter remains uncertain.
If we take a rapid overview of the various GSP arrangements, we can see that there are four of them, the general arrangements, which apply to the countries of Asia and Latin America, the only continents not to benefit from bilateral preferential advantages like those which are reserved for the ACP countries and the Mediterranean countries. In this area, we are respecting the economy in general, restoring the preferential margins, simplifying modulation and applying normal graduation rules."@en1
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