Apr 6, 1985

SOME IMPROVEMENTS IN INDIVIDUAL GSP SCHEMES

GENEVA, APRIL 2 (IFDA)— Changes in the Canadian schemes for Generalised System of Preferences, which have been renewed for another ten years, have been viewed positively by the UN Conference on Trade and Development.-

In a report, the secretariat notes that while extending its scheme, Canada has eased its value added requirements by introducing global cumulation under its rules of origin.-

As a result of these changes, materials and parts obtained from other beneficiary countries and further processed in another beneficiary country will be considered as originating in the country of export for the purpose of meeting the 60 percent domestic content requirement.-

Among the other schemes, that of New Zealand has introduced two major changes, intended to be introduced in the course of 1985.-

The first sets a new threshold beyond which countries would no longer qualify as "developing countries" for purpose of GSP.-

This level is set at 70 percent of New Zealand’s per capita GNP, and imports from countries at this 70 percent level or higher will be subject to the normal rate of duty.-

This change is to operate with effect from March 1, 1985.-

Several countries including Singapore, Trinidad and Tobago, Saudi Arabia and Libya, will no longer benefit from GSP preferences of New Zealand.-

Other beneficiaries approaching this threshold are Hong Kong and Spain.-

The second change by New Zealand, to be effective from July 1, 1985, will provide duty-free access to the New Zealand market for products of the LDCs.-

It will benefit the 36 countries so designated by the UN, and will extend across a very wide range of goods.-

However, there will be some exceptions to this concession on grounds of trade policy and protection of domestic industries.-

In particular, some goods in which pacific island nations have an established trading interest may be excluded, as may be a small range of goods in which there is a well-established trade from LDCs in competition with domestic industries.-

In the case of Czechoslovakia, its GSP scheme has added North Korea, Mongolia and Vietnam among its beneficiaries.-

Hungary has extended beneficiary status to Grenada, Mozambique, Thailand and Zimbabwe.-

The Czechoslovak scheme has reduced the number of items excluded its scheme, from 24 to six, while Hungary has added a number of products.-

From June 1, 1984, Norway has removed one product (drinking glasses) from its general list of exceptions.-

The United States has added 22 products to its scheme, representing seven million dollars in eligible trade.-

But the U.S. scheme has also removed two products, representing 33 million in trade from beneficiaries, in response to petitions filed by U.S. producers.

In the area of tariffs, Austria has improved its special regime for handicraft products, by extending duty-free treatment to household utensils of wood and various lamp fixtures of wood.-

The Austrian duty free treatment is extended only to imports from those Third World countries that have concluded a bilateral agreement with Austria to this effect.-

In view of the progressive dismantlement of MFN rates agree under the Tokyo Round, Switzerland has lowered GSP rates, from January 1, 1984, on products that do not enjoy full duty-free treatment – certain agricultural products, textiles, clothing, footwear, umbrellas, unworked aluminium and dry cell batteries.-

The EEC has increased the tariff margin on 51 agricultural products in 1984, while from fiscal 1984, Japan has increased the preferential margin on two tropical products - fresh bananas and palm oil.-

In the area of safeguards, the EEC has suppressed seven products, and added ten others, to its list of sensitive industrial products, bringing this total to 132.-

In fiscal year 1984, Japan increased the total value of ceilings by about 50 percent.-

The reference year for non-sensitive products has been moved forward from 1977 to 1982, while for sensitive products the quotas have been increased by 50, 30 and 10 percent, depending on the degree of sensitivity of the product.-

But the maximum country amount limitation has been reduced one-half to one-third, with the provision that the lower level would not drop below one-half of the individual quota for the previous year.-

In respect of LDCs, Austria has extended duty-free treatment for textile handicraft products originating in LDCs. These products so far enjoyed only 50 percent reduction.-