MercoPress. South Atlantic News Agency

Mercosur members, except Paraguay, de-listed from EU import preference scheme

EU Trade Commissioner Karel De Gucht:‚ an important recognition that key developing economies have become globally competitive’

The European Union issued on Wednesday its revised import preference scheme - known as the Generalised Scheme of Preferences (GSP) - for developing countries most in need which will take effect from 1 January 2014, revealing that all Mercosur full members, except for Paraguay, will no longer benefit.

Likewise there is a review of the overseas countries and Territories, mainly EU territories which includes among others the British Overseas Territories of the Falkland Islands, Gibraltar, St Helena and South Georgia and South Sandwich Islands and will be loosing GSP benefits from 2014.

Following agreement with the Council and European Parliament, Wednesday’s publication contains the specific tariff preferences granted under the GSP in the form of reduced or zero tariff rates and the final criteria for which developing countries will benefit.

The new scheme will be focused on fewer beneficiaries (89 countries) to ensure more impact on countries most in need. At the same time, more support will be provided to countries which are serious about implementing international human rights, labour rights and environment and good governance conventions.

Argentina, Brazil, Uruguay and Venezuela are listed as upper-middle partners since they are countries which have been listed by the World Bank as high or upper middle income economies for the past three years, based on Gross National Income (GNI) per capita.

The rest of the upper-middle partners who will also lose benefits are: Belarus, Russia, Kazakhstan; Gabon, Libya, Malaysia, Palau.

The other Mercosur full member Paraguay remains in the Low and Lower Middle Income partners which total forty and will continue to enjoy GSP benefits. Among the forty are several other South American countries: Colombia, Ecuador, Bolivia and Peru.

“I am delighted that EU Member States and Members of the European Parliament have backed the Commission's proposal to make our preferential import scheme more effective. It was an important recognition that key developing economies have become globally competitive. This now allows us to tailor our pro-development trade scheme to give the countries still lagging behind some additional breathing space and support.” said EU Trade Commissioner Karel De Gucht.

The current GSP scheme will remain valid until 1 January 2014, thus giving economic operators time to adapt to the revised regime.

The Council and the European Parliament built on the Commission's proposal by introducing a wider though limited expansion of products and preferences, a longer transition period for the application of the new GSP, and by expanding specific safeguards to include ethanol and plain textiles.

Beneficiaries in the reformed GSP scheme are expected to start with 89 beneficiaries: 49 least developed countries in the ‘Everything But Arms’ scheme, and 40 other low and lower-middle income partners.

The main country categories which will no longer benefit from the GSP scheme are 33 overseas countries and territories. These are mainly EU territories which have their own market access regulation—and thus do not use GSP to enter the EU. Reform will be in general neutral for them. This category includes the British Overseas Territories of Falkland Islands, Gibraltar, South Georgia and South Sandwich Islands and St Helena, among others.

And 34 countries which enjoy another trade arrangement with the EU which provides substantially equivalent coverage as compared to GSP. This includes countries with a Free Trade Agreement or with autonomous arrangements (such as the Market Access Regulation for countries with an Economic Partnership Agreement (EPA) or the special regime for Western Balkan countries). Given that use of GSP is marginal for these countries, reform will in general be neutral for them.

In 2011, imports that received GSP preferences were worth €87 billion, which represents around 5% of total EU imports and 11% of the total EU imports from developing countries.