In addition, GSP preferences are not only suspended due to the exclusion or
graduation rules, as both individual EU member countries and the European
Commission can appeal to a “safeguard clause” in the GSP system, which states that
when GSP preferential imports from a beneficiary country cause, or threaten to cause, serious difficulties to an European producer of like or directly competing products,
Common Customs Tariff duties may be reinstalled at any time. The safeguard clause
makes it possible for the EU to withdraw the preferential preferences granted under
the GSP scheme. Therefore, its main disadvantage for beneficiary countries is an
adverse effect on the predictability of future preferences, which in turn might
discourage sustained investment in the supply capacity of the beneficiary countries.
c. The EU’s GSP and major beneficiary countries
The preferential imports under the EU’s GSP have experienced a significant increase.
The EU’s GSP imports totalled e51 billion in 2006 (an increase of 10 percent over 2005),
e57 billion in 2007 (an increase of 12 percent over 2006) and e68.6 billion in 2008
(an increase of 20 percent over 2007). The current regulation especially favours the
poorest developing countries in need of the benefits from trade. In this respect, the EU
imports from the LDCs increased by 35 percent in 2006 and then remained stable in
2007, while GSP þ beneficiaries experienced an increase of 15 percent in their exports
to the EU in 2006 and a further 10 percent in 2007. Based on trade data for 2007, the
overall volumes of EU imports reached e57 billion under the GSP regime, accounting
for e47.8 billion under the standard GSP, e4.9 billion under the GSP þ , and e4.3 billion
under the EBA, respectively[13].
Table I depicts the top 20 beneficiary countries of the EU’s GSP in 2006 and shows
that the total imports and preferential imports under the GSP from the top 20 beneficiary
countries accounted for almost e454.8 billion and e45 billion, respectively,
representing almost 72.4 percent of total imports and 87.5 percent of preferential imports of all the beneficiary countries, with the average utilization rate reaching
64.6 percent. Although 179 countries qualify for preferential treatment currently under
the EU’s GSP, benefits seem to be going to a limited number of beneficiaries. India and
Brazil take a prominent position in this list, ranking first and second, respectively,
and accounting for almost 27.6 percent of all GSP preferential imports. The top
10 beneficiaries account for more than two-thirds of total GSP imports.
In addition, GSP preferences are not only suspended due to the exclusion orgraduation rules, as both individual EU member countries and the EuropeanCommission can appeal to a “safeguard clause” in the GSP system, which states thatwhen GSP preferential imports from a beneficiary country cause, or threaten to cause, serious difficulties to an European producer of like or directly competing products,Common Customs Tariff duties may be reinstalled at any time. The safeguard clausemakes it possible for the EU to withdraw the preferential preferences granted underthe GSP scheme. Therefore, its main disadvantage for beneficiary countries is anadverse effect on the predictability of future preferences, which in turn mightdiscourage sustained investment in the supply capacity of the beneficiary countries.c. The EU’s GSP and major beneficiary countriesThe preferential imports under the EU’s GSP have experienced a significant increase.The EU’s GSP imports totalled e51 billion in 2006 (an increase of 10 percent over 2005),e57 billion in 2007 (an increase of 12 percent over 2006) and e68.6 billion in 2008(an increase of 20 percent over 2007). The current regulation especially favours thepoorest developing countries in need of the benefits from trade. In this respect, the EUimports from the LDCs increased by 35 percent in 2006 and then remained stable in2007, while GSP þ beneficiaries experienced an increase of 15 percent in their exportsto the EU in 2006 and a further 10 percent in 2007. Based on trade data for 2007, theoverall volumes of EU imports reached e57 billion under the GSP regime, accountingfor e47.8 billion under the standard GSP, e4.9 billion under the GSP þ , and e4.3 billionunder the EBA, respectively[13].Table I depicts the top 20 beneficiary countries of the EU’s GSP in 2006 and showsthat the total imports and preferential imports under the GSP from the top 20 beneficiarycountries accounted for almost e454.8 billion and e45 billion, respectively,representing almost 72.4 percent of total imports and 87.5 percent of preferential imports of all the beneficiary countries, with the average utilization rate reaching64.6 percent. Although 179 countries qualify for preferential treatment currently underthe EU’s GSP, benefits seem to be going to a limited number of beneficiaries. India andBrazil take a prominent position in this list, ranking first and second, respectively,and accounting for almost 27.6 percent of all GSP preferential imports. The top10 beneficiaries account for more than two-thirds of total GSP imports.
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