Chapter News

Remarks by Executive Vice-President and Commissioner for Trade, Valdis Dombrovskis, at the press conference on the new EU Generalised Scheme of Preferences

Speech | 22 September 2021 | Brussels | “Check against delivery”

Ladies and gentlemen,

For fifty years, the EU has supported vulnerable developing countries by giving them preferential access to the EU market.

This has been a shining example of how trade policy can stimulate growth, create jobs and help to eradicate poverty.

By removing import duties, we have helped these countries to diversify their economies, develop sustainably and play a fuller part in the global economy. And this without harming EU industry.

So, we know this preferential system as the Generalised Scheme of Preferences – or GSP.

It has encouraged countries to improve human and labour rights, the environment and good governance. Today, it covers 67 countries – and almost one and a half billion workers.

The scheme has certainly proven its worth over the years.

EU imports from GSP beneficiaries increased by 25% between 2014 and 2019, compared with a 16% rise in imports from all third countries.

And this was particularly the case for the least developed countries that have benefitted from the most generous preferences.

But it’s not only about economic development.

It’s about more sustainable development too.

For example, Sri Lanka committed to fully eliminating child labour by 2022. It was able to reduce this to 1% of the child population in 2019, partly thanks to its new ‘Child Labour Free Zones’.

And Bolivia raised the minimum working age to the internationally accepted standard of 14 years.

Now, we want to build on the success of the GSP scheme and take it further – especially since the current set-up will expire by the end of 2023.

There is no need to overhaul the scheme, as we did 10 years ago. But we will do some fine-tuning, to respond better to the changing needs and challenges of beneficiary countries – and to bring the scheme closer in line with our trade sustainability principles.

We plan to keep the current structure with its three market access arrangements:

  • for low and lower-middle income countries, there is the standard GSP;
  • GSP+ for vulnerable countries, based on sustainable development and good governance commitments; and
  • Everything But Arms for least developed countries.

Today’s proposal aims to reinforce the scheme’s social, environmental and climate aspects, reduce poverty and increase export opportunities for developing countries.

We do this in a number of ways.

For example, by better focusing preferences on less competitive products and countries so that the EU trade advantages go to the countries that need them most.

Then, by expanding the list of international conventions and agreements with which countries must comply to receive those advantages. At present, there are 27.

We propose adding six more conventions on human and labour rights, rights of people with disabilities, rights of the child, and transnational organised crime, for example. And we are replacing the Kyoto Protocol with the Paris agreement on climate change.

And by updating the system of withdrawing GSP preferences to include environmental and good governance conventions if a country is breaching international standards.

If the violation is especially severe, we will activate an urgent procedure to withdraw preferences more quickly. In doing so, we will also assess the socio-economic impacts of withdrawing the preferences on the country concerned.

It is also important that we maintain a transparent system of monitoring the sustainable development commitments taken by the beneficiaries. Here, the recently created Single Entry Points for complaints can play an important role.

Finally, we are retaining safeguards to make sure that imports do not harm EU industry, and also improve their functioning.

We launched the GSP scheme all those years ago to help developing countries sell more of their products in developed countries and build up their own industry.

It remains a key element of the EU’s trade and development policies. It has stood the test of time – very well. It shows how trade can contribute to integrating low-income countries into the world economy, creating decent jobs and reducing poverty.

We are continuing it – because it works.

And by updating its focus, we will help to advance sustainable development across the world, boost global trade and help those most in need. Thank you.