Good afternoon ladies and gentlemen.
Today the Commission presented a proposal to reform its import scheme for developing countries. We want to adapt the current rules to the changing global landscape.
Over the last decades, the EU has offered reduced duties for developing countries, thereby granting "trade preferences": this is the Generalised System of Preferences, or GSP.
This help is presently provided to 176 countries and territories across the world. It means that these beneficiaries pay reduced duties or no duties at all on imports worth about €60 billion. This is equivalent to just under 4% of all imports into the EU.
The existing incentive scheme has - in part - helped countries to boost their exports and to integrate into world markets.
Furthermore, we recognise and commend the achievement of countries classified by the World Bank as higher or upper-middle income countries - such as Russia, Malaysia, Saudi Arabia or Qatar. This achievement is such that their income is similar or even higher than that of some EU Member States. So we thought that trade preferences did not make that much sense anymore.
We also need to recognise that the world has changed since this system was introduced in the 1970s and so too has the pattern of international trade. And so should our policies.
So this means that, on the one hand, we have a group of countries now rising from poverty to new found economic strength. However, on the other hand and in the light of the economic crisis, many less advanced countries have fallen behind - in particular the poorest.
Their development needs are enormous in comparison with the economic frontrunners. And yet, almost 40% of our current preferences benefit Russia, Brazil, China, India, and Thailand - which no longer need preferences to maintain and build upon their success. And with many of the others, the EU already has Trade Agreements which offer better market access for goods than the GSP and also for services that are not included in GSP. This is not protectionism - as some have suggested. As I will explain, this updated system will give poorer countries a competitive edge whilst recognising that others are now ready to take their rightful place on the world trade stage - for example by entering into Free Trade Agreements with the EU. So, allow me to briefly explain what today's proposal is about:
First, we want to focus our preferences on those who really need our support - so we go from 176 to approximately 80 countries. The final decision is subject to codecision procedure, but it is about half the number. These 176 are not all countries, they also include overseas territories of EU Member States, for instance, and territories run by other countries, as Guam is by the USA, which means that trade arrangements with such territories should be fully integrated with the countries responsible.
All countries remain eligible to apply for the system should their economic situation change or should their special trade relationship with us lapse. This is not about including or excluding specific countries, but about adapting our trade regime, in place since the 1970s.
Second, we will expand our support for those that are serious about embracing core universal values of sustainable development, in the so-called GSP+ scheme. We want to make the system a real incentive for more developing countries to adhere to key international conventions, for example regarding human rights, good governance or anti-terrorism.
However, there is no blank cheque. The monitoring process will be reinforced and made more transparent - the Commission will have to come forward with reports on its applications - also with the help of the European Parliament which will from now on be involved.
The system should become more stable. It will no longer chop and change so frequently - so allowing more predictability for importers.
The burden of proof will be reversed, so that potential "offenders" will have to prove they apply key international Conventions upon their application for GSP+.
Third: We have also updated the conditions for temporary withdrawal from the whole scheme (including the supply of raw materials, the fight against terrorism) as new conditionalities. In addition, EU business should be pleased that we have the safeguard mechanisms to protect certain EU industries from a sudden surge of imports that applies to the general safeguard and then you have the special safeguards for textiles, fisheries and those can be combined.
All in all, I am convinced this is a fair and balanced proposal which reflects the views of a broad audience including civil society, business, EU institutions, third countries and the general public. It now goes, in parallel, to the European Parliament and the Council of Ministers with a view to enter into force on 1 January 2014. The final list of beneficiary countries will be determined at the end of this legislative process.
We have now proposed this, this will go into the codecision procedure, which will take some time. The process is likely to last one year to one-and-a-half years, which is the maximum amount of time that this can take because some time will be needed for people to become aware of the new system before it is due to enter into effect.
Thank you for your attention.