A preliminary agreement to strengthen the rules of trade preferences for developing countries in the European market

BRUSSELS, 2nd December, 2017 (WAM) – The Presidency of the Council of the European Union and negotiators of the European Parliament have reached a preliminary agreement on updating the regulation of the Generalized System of Preferences known as “GSP”, which grants developing countries trade privileges to enter the European single market.

The new framework begins to be implemented on January 1, 2027, with the strengthening of linking trade benefits to adherence to human rights standards, environmental protection and good governance, and adding a new condition related to cooperation on immigration issues and the readmission of citizens residing illegally in European Union countries.

Denmark’s Foreign Minister, Lars Løke Rasmussen, stressed that the agreement strengthens Europe’s support for developing countries through preferential access to the single market, stressing the need to combine these benefits with respect for basic rights, environmental standards, and sound governance, in addition to cooperation in re-admitting illegal citizens for the first time.

The revised framework maintains the main components of the current system while introducing broad improvements, including expanding the international agreements that beneficiary countries must abide by, allowing the withdrawal of preferences in the event of serious violations of human rights or the environment, and imposing similar measures when the basic principles of climate agreements are not respected.

The new framework also allows for the suspension of trade benefits for countries that do not cooperate with the European Union in the immigration and readmission file, while assigning the European Commission to follow up on compliance and inform Parliament and the Council of any decisions in this regard, in addition to enhancing transparency and involving concerned parties in monitoring the implementation of the obligations of the Generalized System of Preferences programs.

Least developed countries whose classification will be revised over the next decade will benefit from a flexible transition that allows them to obtain support from the preference system, provided that they adhere to strict sustainability standards, while the grading threshold at which preferences for a particular sector are suspended is lowered from 57% to 47% to ensure that support is directed towards the products most in need of competition.

The agreement includes mechanisms to protect European producers, most notably the establishment of an automatic guarantee for rice imports through a tariff quota system that imposes most-favored-nation fees on quantities that exceed historical levels, in addition to special protection measures for imports of textiles and ethanol within the framework of the Generalized System of Preferences, when these imports exceed 6% of the Union’s total imports of the product in question and 47% of the imports of the GSP countries combined.

The preliminary agreement will now be submitted for formal adoption by the Council and the European Parliament before entering into force.

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