The European Commission adopted on 22 September 2021 a proposal for a new EU Generalised Scheme of Preferences (GSP) for the period 2024-2034. The current GSP will expire on 31 December 2023, hence the need to adopt a new GSP regulation.
Under the current and new GSP, low and lower-middle income countries can benefit from a partial or total removal of customs duties on two third of tariff lines (Standard GSP) or a complete removal of customs duties (GSP ). In addition, least developed countries may obtain quota-free access for all products imported into the EU except for arms and ammunition (EBA). A list of GSP beneficiaries can be found here.
Despite being a trade instrument, the GSP serves as well to promote sustainable development and respect for human rights beyond the EU territory. To do so, all current GSP beneficiaries must respect the principles of 15 core UN and ILO conventions on human and labour rights (e.g. ILO Convention concerning Forced or Compulsory Labour, No 29), and GSP beneficiaries in particular must implement 27 international conventions. The enforcement of such conditionality mechanism is strengthened by the possibility to temporarily suspend the benefits under the GSP in cases of serious and systematic violations of the principles laid down in such conventions (see, for example, the EU’s decision to withdraw Cambodia’s preferential access to the EU market).
The new GSP aims to adapt the current system to future challenges. Updating the list of international conventions that GSP beneficiaries should observe would be one way to do so. The following conventions will be added to the new GSP framework: the Paris Agreement on Climate Change, the Convention on the Rights of Persons with Disabilities, the Optional Protocol to the Convention on the Rights of the Child on the Involvement of Children in Armed Conflict, the ILO Convention No 81 on Labour Inspection, the ILO Convention No 144 on Tripartite Consultation, and the UN Convention against Transnational Organized Crime. Such update reflects the EU’s commitment to sustainable development in line with the promotion of its own priorities under the European Green Deal and the European Pillar of Social Rights Action Plan, for example. While the possibility to temporarily withdraw the benefits under the GSP will be maintained in the new scheme, the latter will allow the European Commission to adopt measures within a shorter time period in cases of grave violations of the relevant conventions. The new GSP would thus increase the EU’s responsiveness to cases of grave violations. Withdrawal of benefits will also be available where beneficiaries do not comply with their obligation to readmit their own nationals. The reference to readmission under the new GSP is not surprising considering the EU’s established practice to present readmission as a development opportunity for third countries (see, for example, the New Migration Pact). Nor is it the first time that the EU introduces a conditionality mechanism linked to readmission in a field other than the EU return and readmission policy. Under the New EU Visa Code, for example, the European Commission can propose to apply restrictive or favourable visa measures depending on the third country’s degree of cooperation on readmission.
The new GSP introduces additional novelties, such as, an amended GSP reporting period, from 2 to 3 years, to align it with monitoring reports of UN bodies, an improved monitoring and implementation system meant to increase transparency and participation of relevant stakeholders, and the possibility to use the recently created Single Entry Point mechanism for non-compliance complaints concerning commitments under the new GSP.
In light of the above, the new GSP is coherent with other EU policies, in particular development cooperation, promotion of human rights and contribution to Agenda 2030. It is also an opportunity for developing countries to bring their labour, social and environmental standards closer to international levels and thus, strengthen their capacity to compete in international markets. Indeed, practice across different regions in the world shows that embedding sustainability concerns into trade policy is the way forward (see, for example, the separate Labour and Environment Chapters in the 2020 United Nations-Canada-Mexico Agreement). The WTO itself offers an additional example of such practice, for its members are currently taking part in a new initiative on trade and environmental sustainability that seeks, among others, to phase out fossil fuel subsidies that encourage wasteful consumption. By contrast, examples of current free trade agreements not containing sustainability provisions are rare, as it is the case of the Regional Comprehensive Economic Partnership Agreement signed between Australia, China, Japan, South Korea, New Zealand and the Member States of the Association of Southeast Asian Nations. However, the European Commission’s proposal may risk to overload the new GSP and render the measurement of its effectiveness even more complex. Be it as it may, the discussions in the European Parliament and the Council will shape the content of the final GSP Regulation.
Maddalen Martin, Proposal for a new EU Regulation on the Generalised Scheme of Preferences, actualité du CEJE n° 32/2021, disponible sur www.ceje.ch