Local view for "http://purl.org/linkedpolitics/eu/plenary/2003-04-08-Speech-2-199"
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"en.20030408.6.2-199"2
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".
I would remind you that the graduation mechanism, which is the subject of Mr Salafranca's question, has been part of our Generalised System of Preferences since 1995. This system seeks to encourage the economic development of the countries benefiting from these preferences by enabling them to increase their exports to the Community and by targeting these tariff preferences at the countries that need them most.
That being said, and to respond to the concerns that have been expressed both by several Members of Parliament and by some of our Member States, as well as by some traders and, obviously, by the countries in question, the Commission has agreed to show a degree of flexibility. The graduation mechanism, which was supposed to enter into force at the end of 2002 as provided for in the regulation, has not yet entered into force and the countries have therefore been able to continue to benefit from the GSP. The final date is still under discussion and should be decided on shortly by the Council of Ministers. So, even though we do not share all of the concerns that have been expressed, in this case we have started to show flexibility.
The objective of this system is to encourage the development of exports from the countries that benefit from the preferences, with the corollary that the preferential treatment has to stop once this objective is reached. This system of trade preferences cannot go on forever; it has to have a time limit, which is why we have the graduation mechanism. This enables limits to be imposed, based on the fact that only some sectors need the GSP. This graduation is determined by objective and neutral criteria, which are included in our legislation and are directly linked to the export specialisation in the countries concerned.
The Commission understands the concerns expressed by Mr Salafranca, which moreover coincide with those expressed by some of the beneficiary countries. Nevertheless, we feel that, overall, fears about the impact of this graduation are exaggerated, even if we are prepared to show a little flexibility in this case.
In the case of Colombia, which is the subject of the first part of your question, most of the exports concerned are cut flowers and the exports mainly go to the American market. It is therefore not very likely that a slight increase in European customs duties will affect the general level of exports of cut flowers from Colombia.
In the case of Costa Rica, where it is both plants and cut flowers that are affected, we do not share the concerns that have been expressed in various quarters either. Costa Rica is a country that is developing relatively well. Its overall economic situation has improved and in terms of specialisation, which defines as it were the competitiveness of a sector in the country compared with this same sector in other countries, it is clear that Costa Rica remains competitive.
Turning now to your question about the impact of the graduation mechanism on countries that benefit from the specific system of preferences fighting against the cultivation of drugs, it is true that when it was first set up the graduation mechanism did not apply to the 'Drugs' GSP. The situation was changed in 2001 with a Council regulation applying the new scheme of preferences up to 2005 and bringing the 'Drugs' GSP into line as it were with the standard scheme. Why this change? Because we wanted to avoid this 'Drugs' GSP being challenged at the WTO on the grounds of its discriminatory nature. Incidentally it did not escape the attention of India, which has opened a dispute against us before the WTO on this matter. I think that we should be able to defend ourselves.
Finally, let us take a look at the results of applying the graduation mechanism in the past. We see that the withdrawal of preferences has generally not hindered exports of the products concerned from the beneficiary countries. If we look at what has happened in the region mentioned in the question, and in particular in Chile and Mexico, we see that applying graduation has not stopped exports from these countries continuing to grow. It is also true that multilateral negotiations are yielding regular cuts in customs duties, with the result that both duties and preferences are less and less significant as time goes on.
Let us remember finally that if this preferential treatment is withdrawn, it is the European importer that has to pay the duty in question, perhaps by cutting his margin slightly, and we all know that in the case of an importer this is usually comfortable.
Colombia and Costa Rica therefore meet the objective conditions in our legislation for having the graduation mechanism applied and we do not agree with the analysis according to which this would be a considerable blow to their economies. Graduation is not a sanction; quite the opposite. It means that the exports of the country concerned have reached a level that is self-sustaining without the support of the preferences system and that the objectives of economic competitiveness and maturity that we wanted to foster have been reached."@en1
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