European approved GSP for textile and apparel trade

After the vote of the European Parliament members, the EU created a law on the trade concession plans for developing countries, effective from January 1, 2014. The parliament-supported plan will remove high-income and high-middle-income upper-income countries from the plan so that more poorer countries can enter the plan. The European Parliament also determined that the parliament will supervise the decision of which countries have obtained the preferential treatment. The toughness that EU textiles provide for the textile sector and products has expanded to some ores that have special value to developing countries.

This updated benefit system (GSP) eliminates tariff preferences (such as today's tariff cuts or zero tariffs), that is, for EU-importing countries, per capita income exceeds $4,000 for four years, which reflects the reality that many Pratt & Whitney Beneficiaries (including Russia, Brazil, and Saudi Arabia) now compete on an equal footing with the EU in the world market. The result of the vote was 503 votes in favor, 207 votes against and 37 votes.

The new rules will allow three new countries (Pakistan, the Philippines and Ukraine) to apply for EU zero tariffs on products they export to the EU under the "GSP+" incentive mechanism. In order to be eligible, these exports must be less than 2% of the EU's total GSP imports (above today's 1%), and these countries must prove that they are in compliance with 27 international conventions in the field of ** and sustainable development.

However, in order to ensure that the GSP+ concessions will not lead to a surge in imports and damage EU textile and apparel products, EU parliamentarians have negotiated a rule with the Council that if the EU imports from a country increase by 13.5% within one year (below (15% proposed by the Council), or imports of special products exceeding 6% of the EU's total imports of these products (below the Council's recommendation of 8%), will suspend the country's tariff preferences for such products

Members of the European Parliament also extended the scope of GSP-covered products to a number of unprocessed metals (aluminum oxide, lead, cadmium, and others) that have special value for some countries (mainly in Africa) and therefore remain in Benefit scheme.

The parliament oversees the GSP decision. This is the first time that the parliament has exercised its powers and has been proposed by the "Lisbon Treaty" to legislate on the GSP. Parliamentarians in the European Union have negotiated a rule to ensure that the parliament has a right of veto for coverage of GSP countries, product coverage, import thresholds, or any changes in the temporary cancellation of GSP preferences (currently Belarus and Myanmar).

Most high-income and upper-middle-income countries have been removed from the GSP. For example, Colombia and Peru have negotiated alternatives to free trade agreements or other preferential agreements. However, several countries in such countries, including Argentina, Brazil, Russia and Saudi Arabia, have not yet reached an alternative agreement.