How to explain the dominant position of the industrial sector and the limited role
played by the agricultural and textile sectors in the GSP imports from the ASEAN
countries? As explained above, the products coverage in the industrial sector has
greatly expanded after the introduction of the new GSP regulation in 1995 and a new
classification of products in 2001, which highly contributed to a steadily increasing
share of industrial products in the GSP preferential imports after 1995. In contrast to
the industrial products, the EU imports of agricultural products are still confronted
with relatively high restrictions for ASEAN countries as compared to the ACP
countries, since the latter enjoy more preferences under the Cotonou Agreement. This
evidently explains the lower share of GSP preferential imports of agricultural products
from the ASEAN countries. In addition, the significant drop in preferential imports
from 1997 onwards for instance, is to a large extent attributable to the successful
completion of the Uruguay Round, which significantly lowered and/or abolished MFN
duties in a number of sectors. As a result, the scope for preferential imports
considerably diminished.
Figure 6 shows the GSP utilization rate of all ASEAN beneficiaries and shows that
the utilization rates of all three sectors follow the same course between 1994 and 2007.
It is, however, somewhat surprising to find that the agricultural sector showed the
highest utilization rate (71.1 percent) among the three sectors, with the industrial sector
(56.8 percent) and textile sector (37.3 percent) ranking second and third, respectively.
Although many agricultural products remain uneligible, the GSP preferences for those
that are eligible are to a considerable extend used by the ASEAN exporters. As for the
textile sector, restrictive rules of origin are an important reason for the far from full
exploitation of the GSP preferences by beneficiary countries. Brenton and Manchin (2003) have argued that the adverse effect of restrictive rules of origin is particularly
present in the textiles and clothing sector, where many technical requirements
currently replace the normal “change of tariff heading” rule, making it even harder for
developing countries’ exports to qualify for preferential treatment. It remains to be seen
whether the new rules of origin that are currently being prepared by the European
Commission for use in its PTAs will finally reduce the gap between the theoretical
value of the preferences offered and their value in practice.