GENEVA — The European Union on Thursday agreed to a new list of products that receive reduced duty rates, which is likely to benefit textiles and apparel exporters from poor African, Asian and Latin American nations.
“This is our single-most-important trade tool for development,” EU Trade Commissioner Peter Mandelson said in a statement marking the end of three months of negotiations. “It will focus EU trade preferences on the countries most in need, including those hit hard by the Asian tsunami last December.”
The big loser under the new general system of preferences scheme is China and to a lesser extent India, which will only be entitled to preferences for apparel, but not textiles. Under the new terms, thresholds for GSP rates will be set at a 15 percent share of most exports from qualifying countries. However, access for textiles and apparel will be at a 12.5 percent share, but assessed separately and on an annual basis.
If a poor country also qualifies for a special “GSP plus” program linked to adherence to labor, environmental and human rights standards, it can enter duty free. The new GSP levels are slated to go into effect Jan. 1, but the GSP-plus program will began July 1 for countries that qualify.
The EU Council will formally adopt the agreement on Monday.