ISLAMABAD, Aug 7: The European Commission (EC) has sought views and suggestions from developing countries, including Pakistan on formulation of new a generalized system of preferences (GSP) scheme to help them to get maximum benefit from international trade.
Officials sources told Dawn on Saturday that the GSP was a key instrument to help developing countries to reduce poverty by generating revenue through international trade. The new GSP scheme would be effective from January 1, 2006 till 2015.
Elaborating further, the officials said following the feedback from all other beneficiary countries, the EU member countries would hold their first consultation in September 2004 on the issue. And as a result of the discussion on the new GSP scheme, it was expected final recommendations would be made by end October 2004, the officials said and added final GSP document should be ready by end of the current year.
Pakistan has yet to start consultations with the relevant stakeholders on each product and sectors for seeking their comments and views to make best use of the new GSP scheme offered by the EU to developing countries.
According to the copy of new GSP made available to Dawn, the commission proposed to improve the current system in a number of areas: simplification (cutting back the five separate arrangements, which exist at present); focussing the benefits on those developing countries most in need; fostering regional cooperation and strengthening the focus for additional GSP benefits on sustainable development.
The main feature of the scheme were to target the scheme on the countries that most needed it - least developed countries (LDCs) and the most vulnerable developing countries (small economies, land-locked, small islands and low income countries).
The commission also proposed to reduce the current five GSP arrangements to three - a general arrangement, the "Everything but Arms", giving duty- and quota-free access to the EU market to the world 50 poorest countries and a new GSP plus giving tariff preferences to countries with special development needs.
The new scheme also focussed on graduation - withdrawal of GSP - only on the most competitive products from those beneficiaries that were highly competitive on the community market and on longer need the GSP to boost their exports to the EU. In addition, small beneficiaries would not face graduation, and in addition special consideration would be given to the countries most in need designing the graduation mechanism. A new incentive to encourage sustainable development and good governance was proposed to replace former drugs, social and environment schemes by a new category - the GSP plus providing special incentives for countries that accept the main international conventions on social rights, environmental protection and governance, including the fight against drugs production and trafficking.