2014 – EU’s Revised Trade Rules to Assist Developing Countries

European-Commission-Logo-squareThe European Union’s rules determining which countries pay less or no duty when exporting to the 28 country trade bloc, and for which products, will change on 1 January 2014. The changes to the EU’s so-called “Generalised System of Preferences” (GSP) have been agreed with the European Parliament and the Council in October 2012 and are designed to focus help on developing countries most in need. The GSP scheme is seen as a powerful tool for economic development by providing the world’s poorest countries with preferential access to the EU’s market of 500 million consumers.

The new scheme will be focused on fewer beneficiaries (90 countries) to ensure more impact on countries most in need. At the same time, more support will be provided to countries which are serious about implementing international human rights, labour rights and environment and good governance conventions (“GSP+”).

The EU announced the new rules more than a year ago to allow companies enough time to understand the impact of the changes on their business and adapt. To make the transition even smoother for exporting companies, the Commission has prepared a practical GSP guide.

The guide explains in three steps what trade regime will apply after 1 January 2014 to a particular product shipped to the EU from any given country. It also provides information on the trade regime that will apply to goods arriving to the EU shortly after the New Year.

The changes in a nutshell:

  • 90 countries, out of the current 177 beneficiaries, will continue to benefit from the EU’s preferential tariff scheme.
  • 67 countries will benefit from other arrangements with a privileged access to the EU market, but will not be covered by the GSP anymore.
  • 20 countries will stop benefiting from preferential access to the EU. These countries are now high and upper-middle income countries and their exports will now enter the EU with a normal tariff applicable to all other developed countries.

For the finer details of the revised EU rules visit: http://europa.eu/rapid/press-release_MEMO-13-1187_en.htm?locale=en

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GSP – Good news for developing countries

The European Commission adopted a regulation revising rules of origin for products imported under the generalised system of preferences (GSP). This regulation relaxes and simplifies rules and procedures for developing countries wishing to access the EU’s preferential trade arrangements, while ensuring the necessary controls are in place to prevent fraud.

The Regulation adopted by the Commission today will considerably simplify the rules of origin so that they are easier for developing countries to understand and to comply with. The new rules take into account the specificities of different sectors of production and particular processing requirements, amongst other things. In addition, special provisions are included for Least Developed Countries (LDCs) which would allow them to claim origin for many more goods which are processed in their territories, even if the primary materials do not originate there. For instance, an operator in Zambia that produces and exports plastics to the EU will benefit from the new rules of origin, because even with up to 70% of foreign input the exported plastics can still be considered as originating from Zambia. These new rules should greatly benefit the industries and economies of the world’s poorest countries.

The proposal also puts forward a new procedure for demonstrating proof of origin, which places more responsibility on the operators. From 2017, the current system of certification of origin carried out by the third country authorities will be replaced by statements of origin made out directly by exporters registered via an electronic system. This will allow the authorities of the exporting country to re-focus their resources on better controls against fraud and abuse, while reducing red-tape for businesses. The new rules of origin will apply from 1 January 2011.

For more information on the new proposal please check: http://ec.europa.eu/taxation_customs/index_en.htm