EUROPEAN Union (EU) trade chiefs are planning to strip away special export advantages granted to China, India, Indonesia and scores of other fast-growing economies, an EU source said yesterday.
In total, more than 80 emerging economic players also including the likes of Morocco would lose from 2014 benefits gained under a special regime when exporting to Europe’s single market of half a billion consumers, 20 million companies and major state buyers.
The European Commission is discussing a plan to prune radically “to around 90 countries” its existing list of General System of Preferences (GSP) beneficiaries, which currently numbers 176 territories “not classified by the World Bank as high-income countries and which are not sufficiently diversified in their exports”.
Thousands of products enter the EU single market either duty-free or at reduced rates under the scheme, which dates back to the beginning of the 1970s. Later amendments offer additional incentives to states that commit to international norms on labour and human rights.
But the source said the promotion over recent years of many countries through income league tables compiled by the World Bank meant it was “more and more difficult to justify” favours being granted on the grounds of combating poverty.
The move comes alongside bids to nail down bilateral free trade deals with major markets led by India – which otherwise would see billions of euros worth of exports hit with new charges – along the lines of one just passed with South Korea.
EU trade commissioner Karel De Gucht is facing some internal opposition from officials responsible for promoting development aid abroad as well as individual EU states that traditionally push a liberal trade agenda around former empires or colonies, another EU source said.
A compromise may be offered to particularly vulnerable states, including Cape Verde, Botswana or Mauritius, according to this source, to “give them more time to adapt.”
