Apr 13, 1985
GSP NOW "ALMOST UNRECOGNISABLE".
GENEVA, APRIL 11 (IFDA/CHAKRAVARTHI RAGHAVAN) – The Generalised System of Preferences (GSP) has become "almost unrecognisable", owing to the various changes made and continue to be made at will, the Group of 77 complained Thursday.-The spokesman of the Group, Dr. Ahmed Saker of Syria, was speaking in the UNCTAD special Committee on Preferences.- As a result of the changes and modifications, Saker said the GSP had "considerably deviated" from its original design.- It was now "non-generalised" since many Third World countries had been arbitrarily excluded for political and other criteria, from the start.- Various restrictive devices in the schemes have had "discriminatory effects in the preferential treatment" among Third World countries.- "Finally some schemes demand reciprocity", Saker noted.- The Group of 77 had raised the issue of non-observance of GSP principles a number of times, and time and again they had been "reassured" that the principles would be fully adhere to.- The generalised, non-discriminatory and non-reciprocal character of the GSP was reaffirmed as recently as 1983 in the Belgrade UNCTAD Conference resolution.- Yet developments since the last review of the GSP in the Committee clearly indicated "erosion of these principles".- Built-in restrictive devices continued to multiply, and in many instances were imposed as soon as Third World countries began "to demonstrate a genuine capacity to take advantage of the system".- In a number of cases, these restrictions have gone a step further and aim at outright exclusion of certain countries from the GSP.- Not only was the Third World country concerned denied its rights under the international trading system, but faced "new demands" for assuming obligations that might prejudice its development objectives.- For the GSP to be more effective, it should include products of export interest to the preference-receiving countries, especially the Least Developed Countries (LDCs).- The product coverage should also be expanded to include the agricultural sector, commodities and labour-intensive industries like textiles and footwear.- "But if preference-giving countries persist in using criteria of product-specific and country-specific graduation it is clear that in no time the benefits of the GSP will be completely eroded", Saker said.- No one denied the right of the industrial countries to ensure that GSP imports did not cause injury to their domestic producers.- But what was at issue was the tendency to take measures when there was no evidence of prejudice or without reasonable tests of objectivity in the grounds for actions.- The industrial countries, Saker complained, up to now had not been prepared to accept any agreed economic criteria to define injury.- While it was conceivable that some products could be withdrawn from preferences on the basis of "clearly defined notions, such as injury, it was totally unacceptable" that a Third World country could be excluded outright from preferences on the basis of arbitrary concepts, such as per capita income-thresholds.- "The Group of 77 deplores the unilateral, arbitrary and discrminatory nature" of decisions to exclude certain Third World countries from the list of GSP beneficiaries, and would appeal to the preference-giving countries to abide by the commitments they had voluntarily undertaken, and remove such features from their schemes.- "We wonder how it would appear to developed countries if developing countries relied on their own graduation criteria to treat the more industrialised developed countries less favourably than the less industrialised developed countries", Saker asked.- In a reference to the modifications introduced in the U.S. schemes, Saker said the Group of 77 was deeply concerned by the new dimensions now added to the GSP, in particular the requirement that Third World countries should provide concessions and should modify their internal economic policy as a condition for keeping the preferential access in the U.S. market.- Rejecting the arguments of the U.S. and others that third world countries should be integrated into the international trading system and encouraged to open up their markets to outside competition, Saker said it was ironical that such claims could be made when the rules of the international trading system "specifically enjoin these (industrial countries) from taking measures that are detrimental to the development, trade and financial needs of developing countries".- The 1979 GATT framework agreement, giving a legal basis to the GSP, Saker pointed out, had "explicitly reaffirmed all the principles on which the system is based, including its non-reciprocal character".- "We fear that the new scheme (of the U.S.) creates more uncertainty by increasing the discretionary power of the executive authority can be used for political purposes against developing countries", Saker added.- The GSP, now at a crucial stage, thus faced "serious threats", and its benefits had become "extremely uncertain".- "We therefore urge the preference-giving countries to review and reconsider the relevant provisions of their schemes, which are detrimental to the growth prospects of the developing countries and are inconsistent with the objectives of the GSP".- While some of the schemes had introduced special measures favouring the LDCs, such special measures were still to be introduced by a large number of other preference-giving countries.- A number of products of interest to the LDCs had not also been covered.- Overall, less than 50 percent of dutiable imports from the preference-receiving countries was now covered by GSP.- How could the GSP be considered stable if restrictive measures continued to proliferate or when a large number of products of export interest to the Third World countries continued to be excluded from the system?. And how could Third World countries "respond positively to all these additional demands" from industrial countries when Third World countries were in such a difficult economic situation with a serious balance-of-payments and debt problems? Saker also appealed for voluntary contributions to enable the UNCTAD technical assistance activities in this area to be continued.- He also complained that no UNCTAD seminars had been organised for the African region in 1984. Future technical assistance activities of UNCTAD, he said, should be balanced as between the three regions of Asia, Africa and Latin America.- In other comments, Ms. Marie Plate of Netherlands, speaking for the OECD group of countries, said that with the renewal of the U.S. and Canadian schemes, 1984 marked "a kind of milestone" in the GSP, and the system as a whole had "passed the test" and had been given "a new bill of health for its second decade".- While not a panacea for overcoming the hardships in economic development, the GSP had made a solid contribution to increasing export opportunities for the Third World, particularly in manufacturer goods.- The schemes had not been "static", and within their possibilities, the preference-giving countries had continued to improve their individual schemes and refine their provisions.- Some of the changes introduced had aimed at improving "the distribution of benefits by expanding the preferential opportunities for LDCs or by limiting the growth of benefits received by a few developing countries which are competitive on the international market".- Hungary’s Istavan Major, speaking for the Socialist countries, said that the preference-giving countries of his group had continued their efforts to ensure that beneficiaries could make fuller use of the respective schemes.- The schemes of the Socialist countries, he noted, did not exclude any categories of goods nor did they contain "any discriminatory elements or built-in safeguard mechanism, nor quota, ceilings or other types of restrictions for certain groups of products".- The Socialist countries had also applied now unified rules of origin - applying a single-value added criteria of an import content of up to 50 percent of the FOB exports price of goods and a cumulative approach.- Tanzania’s Elangwa Mbaga complained that even LDCs had not been spared in the product-specific graduation changes.- LDCs were only "small suppliers", and it could not be contended that their exports created "market disruptions and injury" in the industrial markets.- A number of products of export interest to LDCs had been excluded on grounds of "sensitivity", which would be "an exaggeration", given the fact that LDCs were small suppliers, he added.-