Squabble blocks tariff reductions

Date: 16/04/1998

By Mark Turner

PROPOSALS to give socially-responsible developing countries increased access to European markets could be sunk because of squabbles between EU governments and the European Commission.

The argument focuses on the principle of 'comitology' - the arcane system which determines how the Union makes day-to-day decisions.

The European Commission called last year for developing countries which apply internationally-agreed labour rules and forestry standards to be given double the normal tariff reductions on industrial goods, and two-thirds more on agricultural produce.

Under the current generalised system of preferences (GSP), developing countries such as India and Brazil get tariff-free access for non-sensitive products, 65% tariff reductions for 'semi-sensitive' products (such as leather), 30% off sensitive products (like shoes), and 15% off those deemed 'very sensitive' (many textiles).

According to the Commission's original proposals, qualifying countries would therefore have been awarded 60% reductions for sensitive industrial products, 30% for very sensitive goods and tariff-free access for other categories.

Countries which had 'graduated' from the GSP in certain sectors (due to growing competitiveness) would also have benefited.

But a dispute broke out earlier this year over the procedure to be used to establish whether or not a country was applying the social rules.

Spain insisted that the decision should be taken by a regulatory committee, giving national governments substantial control over the Commission's proposals.

The institution refused to accept this, claiming that the assessment should be based on developmental and not political grounds. It also refuses to discuss comitology issues ahead of substantial proposals, expected soon, for reforming the system.

If the Commission does not back down, the plan to revise the tariff rules would have to be unanimously accepted by national governments rather than by a qualified majority of member states.

This means that the whole package could yet be defeated, even though the UK presidency has already managed to forge a compromise between northern and southern countries on the substance of the proposals.

Under the latest draft, very sensitive goods would benefit from 25% tariff reductions rather than 30%.

An inter-institutional comitology dispute is holding up a proposal to give socially-responsible developing countries increased access to European markets.