CHANGES IN GSP ONLY BY MUTUAL AGREEMENT, SAYS GROUP OF 77.

Apr 28, 1984

CHANGES IN GSP ONLY BY MUTUAL AGREEMENT, SAYS GROUP OF 77.

GENEVA, APRIL 26 (IFDA/CHAKRAVARTHI RAGHAVAN) -- Any changes in the preference schemes under the Generalised System of Preferences (GSP) should only be by mutual agreement, the Group or 77 insisted Thursday.-

Speaking at the Committee on Preferences, the group spokesman, Syria's Ahmed Saker said the introduction of the concepts of "graduation" and "reciprocity" was not "acceptable".-

Such concepts, he added, would also not accord with part four of the General Agreement on Tariffs and Trade, and would be against the Tokyo declaration and the UNCTAD-VI resolution.-

Besides the G77 spokesman, a number of preference-giving countries, also spoke outlining some of the changes being introduced in their respective schemes.-

Syria said that an analysis of the GSP schemes over the last decade led to the conclusion that the GSP had made a positive contribution to the trade of the developing countries.-

And, while some efforts had been made in improving product coverage and reducing quantitative restrictions, the actual implementation had fallen short of the accepted objectives.-

This was largely due to the "increasing departures from the principles which are the very basis of the scheme".-

Since the last review in the Committee, two years ago, there had been "an intensification of negative developments" in the operation of the various GSP schemes.-

Concepts "totally alien to the scheme" such as reciprocity, discrimination and graduation were being given increasing importance by several preference-giving countries.-

Such developments represented "a retrogression in the whole process of the GSP" and reflected "a reinforcement of negative protectionist tendencies" that seriously affected the trade prospects of developing countries and made world economic recovery more difficult to attain.-

Apart from aggravating the difficult situation faced by the developing countries, graduation did not improve the situation for countries obtaining less benefits from GSP, but only excluded those who had benefited.-

The implications of graduation and reciprocity were even more serious in view of the large debt and debt-servicing and, balance-of-payments problems faced by these countries.-

The overall product coverage of the schemes was less than one-half of the dutiable imports from beneficiaries, and due to the increasingly discriminatory application of the schemes, only one-quarter actually received GSP benefits.-

The G77 spokesman asked for inclusion of agricultural products, in particular fruits and vegetables, in GSP schemes, in view of the heavy dependence of many developing countries on these exports.-

He also underlined the call from Belgrade for special treatment to the least developed countries.-

On the proposed changes in the U.S. GSP schemes (now pending before Congress), Syria said the contemplated changes would affect not only the beneficiaries' trade with the U.S.A., but the GSP as a whole.-

"If such changes actually materialise, the actual GSP system will change in its character and, very importantly, in its trade effects for the developing countries".-

This was more so in view of the importance to the concept of "burden-sharing" among the preference-giving countries.-

The Group of 77 had also drawn repeated attention in the past to the lack of "agreed, objective criteria" governing any "safeguard" action in GSP.-

The trade and development board should establish "a set of multilateral guidelines for the operation of GSP with a view to ensuring its stability and improving its effectiveness".-

The Belgrade Conference's unanimously agreed resolution called for "consultations" between preference-giving and beneficiary countries before the modification of the schemes.-

"This entails the undertaking to renounce any unilateral measures that may affect the GSP. Changes will consequently have to be made by mutual agreement".-

The group placed also special importance on the continuance of the UNCTAD/UNDP technical assistance programme for GSP and, as called for by UNCTAD-VI, its expansion to cover "other laws, regulations and procedures of the preference-giving countries which affect the exports of developing countries".-

In view of the importance of these technical assistance schemes, some of the G77 members themselves were seeking ways and means of supporting the planned two-year extension of its activities.-

He hoped that the preference-giving countries, and UNDP and other international organisations would also find ways to provide the necessary support".-

The G77 spokesman also called for the reconvening, in the first half of 1985, of the working group on rules of origin in order to review the work of transposing the basis of the GSP rules of origin from the CCCN (Customs Cooperation Council Nomenclature) to the HS (Harmonised System Nomenclature).-

The nomenclatures are used for customs and tariff purposes.-

The new HS system should not result in an erosion of the GSP, but should strengthen it, he said.-

And before the HS system came into operation, agreement should be reached on the rules and criteria to be taken into account by the preference-giving countries to ensure that where a number of alternative courses exist, the decisions taken would be those most favourable to the GSP.-