EU inserts rights, environment, governance issues in new GSP

FE Team | Published: November 22, 2012 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The European Union (EU) Wednesday released its revised version of Generalised Scheme of Preferences (GSP) by inserting human rights, labour rights, environment and governance issues in it for the first time.
The inclusion of labour and governance issues in the scheme may have a long-term impact on Bangladesh's trade relations with the EU member countries, local businesses and analysts observed.
According to a press release, the new scheme will focus on fewer beneficiaries (89 countries) to ensure more impact on the countries which are most in need. It will take effect from January 01, 2014.
At the same time, more support will be provided to the countries which are pro-active and serious about implementing international human rights and labour rights and adhering to the provisions of environment and good governance conventions, the press release said.
Khandaker Golam Moazzem, senior research fellow of Centre for Policy Dialogue (CPD), said inclusion of such human and labour rights issues in the trade scheme may have some long-term impact on the country's trade preferences.
"Those countries which have better labour rights situation would get more preferences from the EU countries which will reduce Bangladesh's competitiveness in future. The country should be more cautious on that particular subject," Mr Moazzem said.
He stated that the exclusion of the beneficiaries will not bring any significant change but will make it challenging for the country's trade pattern with the EU member states.
"This now allows us to tailor our pro-development trade scheme to give the countries still lagging behind some additional breathing space and support," said EU Trade Commissioner Karel De Gucht.
The Council and the European Parliament built on the proposals of the European Commission by introducing a wider though limited expansion of products and preferences, a longer transition period for the application of the new GSP, and expanding specific safeguards to include ethanol and plain textiles.
Among the 89 beneficiaries, 49 along with Bangladesh are from the least developed countries (LDCs) in the Everything But Arms (EBA) scheme, and 40 others are low and lower-middle income partners.
According to the statement, only nine per cent products of tariff lines will remain outside the GSP facility. Bangladesh enjoys its status under the EBA that facilitates duty-free and quota-free access of its all products but arms to the EU market.
The new GSP incorporates a wider though limited expansion in products and preference margins for 23 tariff lines, mainly dealing with raw materials. Such products have been carefully selected to avoid negative impacts on the poorest (LDCs), which already have duty-free, quota-free access for all products, the release added.
In 2011, imports that received GSP facilities in the EU were worth euro 87 billion, representing around 5.0 per cent of total EU imports and 11 per cent of the total EU imports from the developing countries.