This issue is the second of a series which includes the questions circulated by the European Commission on the next GSP regime together with the views expressed by EuroCommerce.
Question 6: Does the parallel co-existence of different preferential regimes (for example GSP and a bilateral trade agreement) for imports into the EU from the same developing country support or hinder effective use of the preferences by that country? To what extent does the co-existence of parallel import regimes create other incoherencies that need to be addressed?
EuroCommerce: At present, we are not aware of any such incoherencies that would need to be addressed.
Question 7: Should the current architecture of GSP – with three regimes GSP, GSP+ and EBA – be changed? If so, how? Does the existence of three sub-arrangements under the scheme affect the effectiveness or transparency of the EU's GSP scheme?
EuroCommerce: No, for the time being it should not be changed, although the GSP – and in particular the GSP plus - is still perceived by many companies as too complex and bureaucratic. Especially the smaller-sized importers reported that the complexity of the rules is still disproportionate to the cost and bureaucracy inflicted by their application.
The parallel existence of the three sub-arrangements as such, however, does not affect the effectiveness or transparency of the EU GSP scheme.
EuroCommerce welcomes that an important supplier country like Pakistan could soon be granted GSP plus status. Pakistan is a very important producer of home textiles; the advantage to import these goods free of duty will possibly lead to an increase in imports from this particular beneficiary.
Question 8: How far in advance of its entry into force should a GSP Regulation be published in order to provide economic operators and other interested parties with enough time to become aware of and adjust to any changes?
EuroCommerce: All elements of the new GSP must be known one year in advance, thus giving traders a reliable basis for their calculation.
The work on Commission and EU-27 level needs to be structured in a way as to enable the publication of the new GSP in the Official Journal not later than one year prior to entry into force.
To this end, EuroCommerce welcomes the proposal made by the European Commission to provide for a roll-over of the current GSP for two additional years in order to allow the necessary time needed by the European Institutions involved.
The same goes for the GSP Plus application round. EuroCommerce understands that the GSP Plus should give an accurate picture of the due implementation of the 27 relevant Conventions; however if the aim is to create an incentive to traders to import consciously from GSP Plus countries, the European Communities need to provide clarity on the country list at a much earlier stage; otherwise the incentive will de facto be meaningless for the first months of validity - as illustrated by the lead times listed in the EuroCommerce position paper published in July 2009, downloadable from the internet: www.EuroCommerce.be/media/docs/intrade/GSP2012EuroCommerce.doc .
No return to annual graduation.
Early warning (one year) for any changes:
An early warning mechanism for GSP users could be operated on the DG Trade website under the umbrella of the Export Helpdesk for Developing Countries.
Relevant information should also be provided in the languages of the main beneficiary countries.
Concerning the GSP rules of origin intrinsically linked with the GSP, EuroCommerce has submitted detailed suggestions in its position paper of July 2009 (see pages 5-7): www.EuroCommerce.be/media/docs/intrade/GSP2012EuroCommerce.doc
In response to the present consultation on the GSP, a member reported the following to EuroCommerce: “Over the past two years, the customs authorities in our country have sent back more than 300 GSP Form A certificates to the Export Promotion Office Dhaka (Bangladesh) in the assumption that they were faked.
Much later – in some cases more than six months (!) – the EPO then informed the customs authorities that the Form A were correct. Ultimately, this was the case for more than 80% of the originally returned Form A certificates.
We as importer have the problem that for the long period of missing evaluation of the EPO we have to build accrued liabilities (costing a lot of interests), and we have to advise our buyers that they should better not calculate the goods free of duty.
In the future, such way of handling by the customs authorities could well lead to the decision that some buyers will simply refrain from placing any more orders in Bangladesh. With the solution suggested in the EuroCommerce position paper (see hyperlink above) we hope that such problems could be avoided.
To illustrate the need for a simple, stable and predictable GSP, EuroCommerce has listed the lead times for individual groups of products (including textiles, textiles articles, ready-made garments, footwear, furniture, vegetable products, foodstuffs and others) in its GSP position paper of July 2009 (see pages 8-10): www.EuroCommerce.be/media/docs/intrade/GSP2012EuroCommerce.doc
Question 9: Are there any aspects of the current GSP Regulation which you consider to be particularly significant as either (a) incentives or (b) obstacles to access to the GSP by beneficiary countries?
EuroCommerce: The GSP is an incentive to importers in the EU to take the entrepreneurial decision to source from the scheme’s beneficiary countries. Hence, the GSP needs to be simple, stable and predictable in order to attract its target group.
The current utilisation rate of approx. 80% is largely due to the improvements implemented over the past decade. In its GSP position paper adopted in 2006, EuroCommerce welcomed the improvements offered by the GSP 2005, especially the increased simplification and enhanced predictability (e.g.: no more annual graduation, GSP specific product classification replaced with HS chapters, a simpler incentive regime (GSP+) instead of the former social, environmental etc. incentive clauses, publication of the GSP more than half a year prior to its entry into force).
The GSP 2009 built on these achievements and further improved the predictability of the system. Importers and retailers were able to plan their sourcing in due time since the Commission published the draft GSP Regulation one year ahead of its entry into force. As the subsequent changes exclusively enhanced the preferential offer, traders were spared unnecessary losses and adjustment costs. The publication in the EC Official Journal in August 2008, however, came later than expected.
The next GSP should consolidate and further develop the improvements contained in the current scheme and provide additional meaningful liberalisation for developing country exports. If the aim is to provide incentives to stakeholders to increase trade against the backdrop of preference erosion, the system must be even simpler, easier to apply, more predictable and give traders more legal certainty.
Related articles:
- Part 1: Europe importers need it simple, stable, predictable - EuroCommerce