Tariff deal to combat drug trafficking

Date: 10/09/1998

By Simon Taylor

POOR countries in Central and South America will be offered 1.5 billion ecu in trade concessions to cut their dependence on drug trafficking if plans due to be approved by the European Commission next week are endorsed by ministers.

The move comes as part of an overhaul of the EU's Generalised System of Preferences (GSP), which offers lower import tariffs on farm and industrial goods to make it easier for developing countries to trade with the Union.

External Relations Commissioner Manuel Marín wants to offer states in Central America and the Andean region trade concessions on industrial goods under the so-called 'drugs regime'. Countries in these areas including Colombia and Bolivia already enjoy advantages on agricultural goods.

But Marín's plan may be challenged by other Commissioners when it is discussed at their meeting next Wednesday (16 September) because only Spanish-speaking countries in Central and South America will benefit from extra concessions.

Sources say Commissioners' special advisers have questioned why Asian countries such as Cambodia and Indonesia are not being offered similar trade incentives to prevent an increase in their heroin production in the wake of the Asian financial crisis.

Marín's staff argue that the countries singled out for special concessions were chosen using the economic criteria laid down in 1995. But as the selection was based on 1996 data from the World Bank, some Commissioners may argue that the categories should be reviewed when new statistics are available revealing the effects of the Asian crisis, which began in 1997.

The GSP is being overhauled to reflect changes in countries' economic health since 1995.

For Least Developed Countries, import tariffs would be cut to zero, with a sliding scale for other nations based on relative wealth.