Jul 7, 1984

EEC PROPOSES IMPROVEMENTS IN GSP FOR 1985.

BRUSSELS, JULY 6 (IFDA/YOJANA SHARMA) – The EEC Commission has finalised proposals for its GSP scheme for 1985, and if accepted by the Ministers will improve Third World access to EEC markets, Commission sources say.-

The GSP (Generalised System of Preferences) scheme allows preferential access to selected Third World product at reduced tariffs and the improvements proposed for next year' will mean potential savings of about 600 million dollars on imports of these products in 1985, the Commission estimates.-

The proposals of the Commission are to be presented to the EEC Ministers for their approval later this year.-

If accepted, the value of GSP imports benefiting from the tariff reductions, could increase by 4.7 percent over 1984, the EEC estimates.-

Under the EEC scheme, duty-free access is allowed for all industrial products from the Third World, but "sensitive" products that compete with "ailing" EEC industries subject to quota restrictions.-

The Commission’s proposals for next year suggest removing 12 products from the "sensitive" list, but add eight new products in their place.-

The eight will be mostly chemicals. But ball-bearings, video-recorders and computers are also expected to be subject to quotas under the "sensitive" category.-

The Commission has also suggested that the existing quotas for the 130 "sensitive" products should be increased by five to 15 percent, except for shoes, leather goods, glass, ceramics and steel.-

A further eleven "sensitive" products will no longer be restricted by quotas but subject to the less stringent "indicative ceilings".-

Agricultural goods enjoy less benefits than manufactures under the EEC GSP scheme.-

But the Commission has proposed adding four products – chicory root, locust bean, cheese fondue and insulin (a kind of starch derived from vegetable roots) to the 390 farm products that so enjoy tariff benefits under the GSP.-

Preferential access will also be widened for 71 products, 13 of them fishery products.-

The EEC has also suggested improving the conditions of entry for tobacco under the GSP.-

Despite guidelines set out in 1980 for the rest of the decade that commit the EEC to progressively favour the Least Developed Countries (LDCs), the main beneficiaries of the EEC’s GSP are still the "newly industrialising countries" of Asia and Latin America, EEC officials say.-

Thirteen of the "most competitive" Third World countries benefit from some three-quarters of GSP imports into the EEC, according to EEC studies.-

The European Parliament has pointed out that the GSP will be worthless to the LDCs unless they agricultural products, protected under the EEC’s common agricultural policy, are brought under the EEC’s GSP scheme.-

However, Italy and Greece have resisted attempts to improve the GSP for agricultural products, in order to protect their own markets from competition.-

This years Greek and Italian Ministers are expected to water down the Commission's proposals so that "there are unlikely to be sufficient improvements to help developing countries gain access to the Community market", a Danish diplomat said.-