The GSP regulation is a trade instrument, which reduces or fully removes import duties on products coming into the EU from economically weaker countries. The aim is to increase export opportunities, to create jobs and to ultimately fight against poverty in countries benefitting from this scheme of preferences. By linking preferential treatment with improving human and workers’ rights, environmental protection and good governance, the GSP shall create incentives to ensure that these are being complied with.
 

The Commission proposes the following innovations:
 

• Greater focus on the observance of climate and environmental protection standards: the agreements that have to be ratified shall be augmented by ambitious environmental and climate provisions.
• Inclusion of further human rights, labour convention and good governance principles: in concrete terms it is planned to enhance the GSP by rules in respect of the rights of people with disabilities, the rights of children, the labour inspectorate and an agreement on combating international organised crime.
• Improved monitoring regarding the implementation of GSP obligations: this shall be achieved by more transparency and the participation of relevant stakeholders. Furthermore, it has been planned to set up a contact point for complaints regarding the non-compliance with regulations.
• Accelerated procedure to retract preferences: cases of serious and systematic violations against GSP regulations shall be dealt with more quickly in the future. The Commission is aware of the fact that in doing so, socio-economic effects on society have to be taken into consideration.
   

In principle, the proposal to reform the GSP is to be welcomed as many of the AK’s requirements for improvement such as increased transparency, more control, inclusion of stakeholders and a greater focus on the observance of labour and human rights as well as eco-political minimum standards have been taken into account. Nevertheless, it is important to emphasise that only when non-compliance is actually being sanctioned, there are true incentives for improving human and workers’ rights and the environment. Even though the GSP provides for sanctions, it only rarely happened that exemptions from duty were revoked in the past. Hence, it remains to be seen whether the ambitious targets will be fulfilled.
 

Reforming the GSP is part of the Commission’s future trade strategy, which intends to be “open, sustainable and assertive”. Apart from that, the new trade strategy aims at improving global supply chains and imposing an import ban on goods produced by forced labour. Last week, at an exchange with civil society, EU Trade Commissioner Valdis Dombrovskis announced that he wants corporate due diligence to be enshrined in statute law by the end of October 2021.
 

Further information: 

European Commission: Proposal to reform EU Generalised Scheme of Preferences
A&W Blog: Trade with the Global South (German only)
AK EUROPA: Realignment of EU trade policy: Change of course or missed opportunity?
AK EUROPA: EU trade policy shall become more ecological
AK EUROPA: Beyond the coronavirus pandemic – Achieving a fair global economy for the 21st century