European Union grants duty-free access to developing countries for respecting human rights and “good governance” standards

On 9 December 2008 the European Commission stated that the products from 16 developing countries will benefit from duty-free access to the European Union under the “special incentive arrangement for sustainable development and good governance” (GSP+).

The GSP+ is a specific tariff arrangement in the context of the Scheme of Generalised Tariff Preferences. It provides for tariff reductions (preferences) for imports from developing countries to the European Union. The current legal basis for this arrangement is EC Council Regulation 732/2008.

The Regulation includes three arrangements:

1) The general arrangement that applies to all developing countries that fulfil certain economic criteria

2) The special arrangement for countries that have been qualified by the UN as Least Developed Countries 

3) The GSP+ which aims at enhancing “sustainable development and good governance”

Under the GSP+ developing countries can obtain additional tariff preferences and even duty-free access for a number of goods. In order to be eligible for the GSP+, the developing countries must have “ratified and effectively implemented” 27 international conventions. These conventions include the main UN human rights treaties, the ILO conventions on core labour standards and certain “good governance” conventions on environmental, corruption and drug issues. Furthermore, the countries must be classified as “economically vulnerable”. This criterion applies to countries that, first, are not classified as high-income countries by the World Bank, and, second, whose imports under the GSP are undiversified and amount to less then 1 % of the total imports to the European Union under the GSP.

The countries that are currently covered by the GSP+ are: Armenia, Azerbaijan, Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Honduras, Mongolia, Nicaragua, Paraguay, Peru, Sri Lanka and Venezuela.

However, it is doubtful whether all of these countries comply with the requirements of the GSP+. Guatemala, El Salvador and Colombia are notorious for violating ILO Core Labour Standards. Also, Sri Lanka and Georgia have an egregious human rights record and are violating numerous rights provided for by the UN human rights conventions. Unfortunately, the Commission has not provided the reasons for admitting the countries. The decision of the Commission remains, hence, somewhat dubious.

The additional preferences may be withdrawn if the country does no longer fulfil the standards of the “special incentive arrangement”. The Commission is currently examining whether the additional preferences of El Salvador and Sri Lanka should be withdrawn due to violations of human rights.