Imminent deadline for GSP-Plus alternative to EPAs with the EU

The EU requires that their EPAs contain these issues.

There is a deadline of 31 October for countries to apply in this round for GSP+ status from the EU. If this deadline is missed, the next opportunity is to meet the next deadline of April 2010. With this deadline fast approaching, it seems surprisingly that few developing countries are aware of this attractive, nonreciprocal, alternative to free trade agreements for market access into the European Union.
In an effort to obtain market access into the European Union (EU), approximately 120 developing countries are negotiating regional trade agreements or economic partnership agreements (EPAs) with the EU.
These "FTAs" require reciprocal market liberalisation. It appears that the EU is requiring African countries in EPA negotiations to eliminate tariffs on about 80% of EU products by import value, according to a recent report co-published by the Overseas Development Institute of the UK.

Politicians and officials of many African countries have expressed serious concerns about th e adverse effects that such drastic liberalization will have on their economies. These concerns include the loss of tax revenue, and a surge of imports that would potentially cause dislocation to domestic farms and industries.
The officials of ACP countries are however also worried that by not signing on to an EPA with the EU, they could lose the preferences they enjoyed under the Cotonou Agreement. This is because the WTO waiver for the EU preferences to ACP countries expired at the end of last year.

Pressure is now put on African and Pacific countries to sign on to an EPA, with some having initialled an interim goods-only EPA. The Caribbean countries in CARIFORUM have recently signed on to a version of the full EPA with the EU.

Several development groups and independent experts have noted that an interesting and viable alternative to these FTAs for many developing countries is to instead enjoy non-reciprocal market access into the EU via its Generalised System of Preferences (GSP).
The GSP is a unilateral World Trade Organization-compatible trade arrangement where the EU provides non-reciprocal preferential access to its market to 176 developing countries and territories in the form of reduced tariffs for their goods when entering the EU. It is implemented by a Council Regulation applicable for a period of three years at a time.The EU's GSP covers three separate preference regimes:

• the standard GSP, which provides preferences to 176 Developing Countries and Territories on over 6300 tariff lines;
• the special incentive arrangement for Sustainable Development and Good Governance, known as GSP+, which offers additional tariff reductions to support vulnerable developing countries in their ratification and implementation of relevant international conventions in these fields; and
• the Everything But Arms (EBA) arrangement, which provides Duty-Free, Quota-Free access for the 50 Least-Developed Countries (LDCs).

According to the EU, the main qualifying criteria are that any GSP+ beneficiary country must be considered "vulnerable" and must also have ratified and effectively implemented 27 specified international conventions in the fields of human rights, core labour standards, sustainable development and good governance.

The EU's Regulation defines a vulnerable country as one:

• which is not classified by the World Bank as a high-income country during three consecutive years, and
• of which the five largest sections of its GSP-covered imports into the Community represent more than 75% in value of its total GSP-covered imports, and
• of which the GSP-covered imports into the Community represent less than 1 % in value of the total GSPcovered imports into the Community.

The first two of these conditions are also applicable to any developing country wanting to benefit from the normal GSP arrangement. It is the third condition that is additional for qualifying for GSP+ (in addition to treaty ratification).

There are about 92 non-LDC countries and territories which meet the vulnerability criteria, according to the EU's list at http://trade.ec.europa.eu/doclib/docs/2008/july/tradoc_139963.pdf.

If applications received by 31 October 2008 are approved, these countries will receive GSP-plus treatment from 1 January 2009 to 31 December 2 011. Furthermore, if countries are unable to meet the 31 October 2008 deadline, the Regulation allows another chance to apply by 30 April 2010 for GSP+ treatment to start from 1 July 2010