MercoPress. South Atlantic News Agency

EU extends preferential tariffs until 2005

The European Union Council of Ministers decided this Monday in Brussels to extend for another year, 2005, the preferential tariffs it grants to developing countries and which represent benefits for the Andean and Central American countries, according to EU sources.

The current system of preferential tariffs by which the EU extends trade benefits to 178 developing countries among which Latinamerica, with the exception of Mexico and Chile, expires December 2004.

The one year extension responds to the fact that the EU "believes it's premature to design a new preferential system" for the next ten years as outlined in the decision, until the WTO discussions have concluded. The Doha round talks are scheduled to end December 2004, but given the current stalemate the date seems quiet more distant.

Brussels intended modifications are targeted to restrict the mechanism for the great beneficiaries and "help smaller countries discover trade as the tool to better integrate to the global economy". Besides the EU will also award greater benefits to those countries that abide international rules in labour and environmental legislation.

In a joint statement the European Commission and the EU said "It's a temporary decision adopted under special circumstances", and is not intended "to harm in any way the orientation of a new tariff preferential system". Discussions on a new EU ten year tariff preferential system are expected to begin in early 2004 and scheduled to become effective January 2006.