Russia, Argentina and Uruguay are among almost 100 countries expected to lose tariff breaks for their food exports to the EU under planned reform of the bloc’s Generalised System of Preferences (GSP) system.
The GSP system lowers EU import duties for emerging market and developing countries on over 6,200 products, including many food lines. EU GSP imports total EUR48bn annually, with 2,400 lines entering duty free.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Because the GSP system is supposed to promote international economic development, the European Commission announced yesterday that it wanted to focus duty concessions on poorer countries. Therefore, those regarded by the World Bank as high- or upper-middle income states would no longer qualify from January 2014. These nations have an average per capita income of US$3,946 to US$12,195.
Other countries likely to lose out would include Iran, Saudi Arabia and the United Arab Emirates. There would also be formal losses of GSP status the likes of Mexico, South Africa and Turkey, although these countries already have good market access through free trade and association agreements.
Major exporters such as India and China would probably hang on to GSP status but that could be lost in future if their growing wealth made them World Bank-certified upper-middle income countries.
Countries would also lose their status if their exports surged above 12.5% of all EU GSP imports of a certain food product – why GSP preferences do not cover Brazilian food exports to the EU.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataExplaining, the proposals – which need to be approved by the EU Council of Ministers and the European Parliament – EU trade commissioner Karel De Gucht said: “If we grant tariff preferences in this competitive environment, those countries most in need must reap the most benefits.”
Gucht also announced changes to the EU’s GSP+ system, which offers even better market access, underlining the need for beneficiary countries to follow international sustainable development and good governance conventions (including human rights) and to have vulnerable economies. Sri Lanka last year lost its GSP+ status over human rights concerns.
