REPORT on the implementation of the GSP Regulation (EU) No 978/2012

26.2.2019 - (2018/2107(INI))

Committee on International Trade
Rapporteur:Christofer Fjellner

EXPLANATORY STATEMENT - SUMMARY OF FACTS AND FINDINGS

On 19 February 2018, the rapporteur was entrusted with the task of preparing a report on the implementation of the GSP Regulation (EU) No 978/2012 applying a Scheme of Generalised Tariff Preferences and repealing Council Regulation (EC) No 732/2008.

I.   Sources of information

Since his appointment, the rapporteur has collected information and has relied on the following sources, among others:

•  Regulation (EU) No 978/2012 of the European Parliament and the Council of 25 October 2012;

•  Regulation (EU) No 607/2013 of the European Parliament and of the Council of 12 June 2013 repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to generalised tariff preferences from Myanmar/Burma, and the European Parliament resolution on reinstatement of Burma/Myanmar’s access to generalized tariff preferences (2012/2929(RSP));

•  Midterm evaluation of the current GSP regulation (Regulation (EU) No 978/2012) and the report from the European Commission accompanied by the Commission staff-working document of 4 October 2018;

•  Commission reports on the Generalised Scheme of Preferences covering the period 2014-2015 and 2016-2017 assessing the effects of the GSP with a focus on the performance of GSP+ beneficiaries;

•  The Public Hearing “Trade preferences for sustainable development: Scrutinising the new GSP+ mechanism after two years” organised in the Committee on International Trade (INTA) 16 February 2016;

•  xchange of views on the implementation of the GSP in the INTA committee meeting 19 of February 2018 and the exchange of views on granting GSP+ to Sri Lanka 21 March 2017;

•  The study on Labour rights in Export Processing Zones with a focus on GSP+ beneficiary countries by the Policy Department, DG of External Policies, European Parliament of June 2017;

•  The study on “Generalised Scheme of Preferences Regulation (No 978/2012): European Implementation Assessment” prepared by the European Parliamentary Research Service (EPRS).

II.  Main findings

Based on the comparative sources of information above, it becomes clear that:

•  The countries eligible for GSP preferences throughout the period 2011-2016, three years before and after the new regulation entered into force, increased their exports to the EU substantially. This was particularly the case for countries under the EBA scheme, as their total import value increased by 62.1%, while the import value of the eligible GSP+ countries went up by 53.8%. Imports from standard GSP remained stable, falling only by 0.3%.

•  GSP imports as a share of all EU imports decreased from 6.1% in 2013, the last year before the entry into force of the new regulation, to 4.9% in 2016, which can largely be explained by the lower number of beneficiaries. The tightening of the eligibility criteria of GSP in the new regulation decreased the number of GSP beneficiaries to 92, with more countries, such as China, graduating after the regulation started to apply.

•  Both the EBA and GSP+ beneficiaries have significantly increased their preference utilisation rates since 2014 by more than 10 percentage points on average, however, 10 out of 49 EBA countries experienced a reduction of their preference utilisation rate by more than 10 percentage points, and standard GSP beneficiary countries throughout the period 2011-2016, has experienced decreased utilisation rates on average by 3 percentage points;

•  The GSP effect on export diversification seems to be ambiguous, as data shows that the level has increased for EBA beneficiaries from an initially low level, while it decreased considerably at all sector levels for standard GSP beneficiaries, and the heterogeneous GSP+ beneficiaries differ significantly in their performance on export diversification;

•  Textile is the dominating sector of GSP imports, with textile imports amounting to 50 percent of total GSP imports in 2016, thereby more than doubling its share of GSP imports compared to the situation before the reform;

•  Diversification seems to have been hampered by the fact that the GSP regulation does not allow for cumulation, or the use of non-originating inputs from countries that have graduated from GSP and those who have remained in the scheme, a practical example being the bicycle industry in Cambodia;

•  There has been a limited negative impact on those countries that ceased to be eligible for GSP preferences after the 2012 reform, as graduated countries seem not to have suffered from long-term impact, except for some specific sectors, such as tobacco producers in Cuba;

•  GSP has clearly incentivised developing countries to ratify international conventions, in seeking to prepare themselves for enhanced access to the EU market through GSP+. While ratification in itself does not necessarily mean that the rights enshrined in the conventions are respected, it provides an important impetus and framework for improvement;

•  The increased monitoring of countries that benefit from GSP+, with a focus on effective implementation - a key demand of the European Parliament in the reform- of the 27 international conventions related to human and labour rights, protection of the environment and good governance, has allowed for a substantial dialogue, enabling the EU to engage with beneficiary countries on all areas where implementation is unsatisfactory;

•  The GSP scheme’s environmental impacts are difficult to determine due to a lack of available data on environmental indicators as well as long-time lags in their availability, evidence suggests that GSP+ has incentivised beneficiary countries to adhere to environmental protection but also increased export of textiles and clothing which tend to have a detrimental effect on the environment;

•  There has been both positive and negative unintended consequences of the GSP reform, such as the creation of female employment opportunities and improved participation of women in the labour force in export industries trading with the EU, but also an accelerated environmental degradation linked to export industries in beneficiary countries;

III.  Key recommendations

•  Consider different measures to increase diversification among the beneficiaries.

•  In this respect, reintroduce in the next GSP regulation the possibility of cumulation with countries that have graduated from the GSP scheme, following the approach of Canada in the reform of their GSP scheme.

•  Consideration should also be given to ways to include services in the next GSP regulation, as a way of promoting increased diversification and in view of the increased importance of trade in services generally, building on experience of the WTO LDC Services waiver.

•  While the Commission has clearly stepped up its monitoring of effective implementation of the required conventions, in particular for GSP+ beneficiaries but also some EBA countries, this process can still be more transparent with a more clearly defined process for submission of information from civil society actors.

•  GSP beneficiaries, and GSP+ countries in particular, should also benefit from increased capacity building in order to be able to implement the conventions more effectively.

•  There is a need for a more targeted approach for withdrawal of preferences, limiting this to specific sectors, or in case of specific violations, maybe consider the possibilities of withdrawing export certification from specific economic operators, with a system of “blacklisting” in the Registered Exporter system.

•  More measures are necessary to ensure that GSP enhances a positive environmental development.

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the implementation of the GSP Regulation (EU) No 978/2012

(2018/2107(INI))

The European Parliament,

–  having regard to Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008[1],

–  having regard to Regulation (EU) No 607/2013 of the European Parliament and of the Council of 12 June 2013 repealing Council Regulation (EC) No 552/97 temporarily withdrawing access to generalised tariff preferences from Myanmar/Burma[2], and to its resolution of 23 May 2013 on reinstatement of Burma/Myanmar’s access to generalised tariff preferences[3],

–  having regard to the mid‑term evaluation of the current GSP regulation of July 2018[4] and the Commission’s report on the application of Regulation (EU) No 978/2012[5] accompanied by the Commission staff working document of 4 October 2018[6],

–  having regard to the Commission reports of 28 January 2016 and of 19 January 2018 on the Generalised Scheme of Preferences covering the periods 2014-2015[7] and 2016-2017[8] respectively, which assess the effects of the GSP with a focus on the performance of GSP+ beneficiaries,

–  having regard to the Public Hearing on GSP organised by the Committee on International Trade (INTA) on 16 February 2016, the exchange of views on granting GSP+ to Sri Lanka on 21 March 2017, and the exchange of views on the implementation of the GSP regulation on 19 February 2018,

–  having regard to Article 5 of the Treaty on European Union (TEU),

–  having regard to Article 21 of the TEU,

–  having regard to Article 208 of the Treaty on the Functioning of the European Union (TFEU),

–  having regard to the European Ombudsman’s Decision in case 1409/2014/MHZ on the European Commission’s failure to carry out a prior human rights impact assessment of the EU-Vietnam free trade agreement[9],

–  having regard to its resolution of 5 July 2016 on implementation of the 2010 recommendations of Parliament on social and environmental standards, human rights and corporate responsibility[10],

–  having regard to its resolution of 12 December 2918 on the annual report on human rights and democracy in the world 2017 and the European Union’s policy on the matter[11],

–  having regard to its resolution of 27 April 2017 on the EU flagship initiative on the garment sector[12],

–  having regard to its resolution of 14 June 2017 on the state of play of the implementation of the Sustainability Compact in Bangladesh[13],

–  having regard to voluntary country-specific partnerships, such as the Bangladesh Sustainability Compact and the Myanmar Labour Rights Initiative,

–  having regard to the 2007 joint strategy of the EU and its Member States entitled ‘Aid for trade: Enhancing EU support for trade-related needs in developing countries’,

–  having regard to the 2030 UN Sustainable Development Goals (SDGs),

–  having regard to the fundamental International Labour Organisation Conventions on child labour, forced labour, discrimination, freedom of association and collective bargaining,

–  having regard to the Council conclusions of 12 May 2016 on the EU and responsible global value chains,

–  having regard to its resolution of 12 September 2017 on the impact of international trade and the EU’s trade policies on global value chains[14],

–  having regard to Rule 52 of its Rules of Procedure, as well as Article 1(1)(e) of, and Annex 3 to, the decision of the Conference of Presidents of 12 December 2002 on the procedure for granting authorisation to draw up own-initiative reports[15],

–  having regard to the report of the Committee on International Trade and the opinions of the Committee on Foreign Affairs and the Committee on Development (A8-0090/2019),

A.  whereas the EU was the first to implement a GSP scheme in 1971 following the United Nations Conference on Trade and Development (UNCTAD) recommendation under which industrialised countries would grant generalised, non-reciprocal and non-discriminatory trade preferences to developing countries, thereby assisting them to generate additional revenue through international trade in an effort to reduce poverty, promote good governance and foster sustainable development;

B.  whereas Article 207 of the TFEU stipulates that the EU’s trade policy must be built on the principles and objectives of EU external policy and promote the values for which the Union stands, asset out in Article 2 of the TEU and contribute to the pursuit of the aims listed in Article 21, including the consolidation of democracy and the rule of law, respect for human rights, fundamental rights and freedoms, equality, respect for human dignity and the protection of the environment and of social rights;

C.  whereas in her conclusions, the EU Ombudsman stated the following: good administration means observance and respect for fundamental rights; where fundamental rights are not respected, there cannot be good administration; the EU institutions and bodies must always consider the compliance of their actions with fundamental rights, and should also aim at furthering the cause of human rights in the partner countries.;

D.  whereas the current GSP scheme was established under Regulation (EU) No 978/2012 of 25 October 2012, adopted on the basis of Article 207 of the TFEU under the ordinary legislative procedure with the European Parliament acting for the first time as a co-legislator for a GSP regulation;

E.  whereas pursuant to Article 40 of the GSP regulation, the Commission is to submit a report on the application of the GSP Regulation to the European Parliament and to the Council five years after adoption, which should shape the next GSP Regulation that is to be adopted by 2022; whereas this regulation has been in force since 1 January 2014; whereas a thorough independent evaluation of the functioning of the present Regulation has been carried out in an effort to provide information for the Commission’s review exercise, and a list of concrete recommendations has been drawn up;

F.  whereas the scheme contains three arrangements: the general GSP scheme, the GSP+ incentive scheme, and the Everything But Arms scheme (EBA); whereas the standard GSP beneficiaries – currently 18 countries – benefit from reduced customs duties on 66 % of all EU product categories; whereas the eight GSP+ beneficiaries export around 66 % of all product categories duty-free in return for their commitment to effectively implement 27 international core conventions that cover labour rights, human rights, good governance and environmental concerns; whereas the 49 least developed countries (LDCs) under the EBA arrangement of GSP are granted duty-free access to the EU for all products, except arms and ammunition; whereas all beneficiary countries are bound by international conventions in the areas of human rights and labour rights under the GSP Regulation, while GSP+ countries are also bound by international environmental and good governance conventions; whereas only the GSP+ scheme provides for a structured dialogue, which assesses the effective implementation of those conventions by the beneficiary countries; whereas GSP beneficiary countries must also be able to implement international standards and norms, including drawing up, implementing and enforcing appropriate legislation, particularly in the area of establishing the rule of law and combating corruption;

G.  whereas the key objectives of the 2012 GSP reform were to better focus on countries in need – the LDCs and other low and lower-income countries – further promote the core principles of sustainable development and good governance, enhance stability and predictability, and improve certainty for business operators;

H.  whereas several international conventions, guidelines and rules aim to prevent human rights abuses; whereas, in particular, the GSP beneficiary countries have the obligation to implement these guidelines and create the appropriate legal and economic conditions under which businesses can operate and find a place in global supply chains;;

I.  whereas the EU should respond even more effectively to social and environmental dumping and unfair competition and trade practices, in addition to ensuring a level playing field;

J.  whereas in several countries, export processing zones (EPZs) are exempted from national labour legislation, thereby preventing the full right to exercise union activity or seek legal redress; whereas the former constitutes a violation of core ILO standards and could lead to further negative impacts on human rights;

K.  whereas gender equality in all EU policies is firmly established in Article 8 of the TFEU; whereas trade and investment agreements tend to affect women and men differently on account of structural gender inequalities; whereas according to the ILO, in 2012, 21 million people worldwide, of whom 55 % were women and girls, were the victims of forced labour, with 90 % of these in the private economy sector;

L.  whereas Article 19(6) of the GSP Regulation requires that the Commission take account of ‘all relevant information’ in determining whether GSP beneficiary countries duly comply with their human rights obligations, including information provided by civil society; whereas the involvement of civil society and social partners in the implementation of the GSP scheme can enhance the legitimacy and effectiveness of the EU’s common commercial policy;

M.  whereas the GSP Regulation allows the EU to suspend preferences in the most serious cases of human rights violations, on the basis of Chapter V, Article 19(1)(a) of the GSP Regulation, which provides for the temporary withdrawal of preferential treatment on a number of grounds, including systematic violations of the principles laid down in the conventions listed in Part A of Annex VIII;

N.  whereas the Commission has launched the process in the case of Cambodia, and is in the process of launching investigations in the case of Myanmar for human rights abuses within the framework of potential withdrawals from the Everything But Arms arrangements;

Main conclusions and recommendations

1.  Welcomes the Midterm Evaluation on the application of the current GSP Regulation, which assesses whether the objectives it has set out are likely to be achieved; welcomes the fact that the new Regulation has seen an increase in exports from beneficiaries of the Everything But Arms (EBA) and GSP+ arrangements, which is an important contributing factor towards poverty eradication;

2.  Notes with satisfaction that in 2016 EUR 62.6 billion worth of imports entered the EU under GSP preferences (a rising tendency), broken down as follows: EUR 31.6 billion from standard GSP beneficiaries, around EUR 7.5 billion from GSP+ beneficiaries and EUR 23.5 billion from EBA beneficiaries (Eurostat data as of September 2017);

3.  Recalls that the GSP helps industries in developing countries overcome the difficulties these countries face on export markets as a result of high initial costs; recalls that, in line with UNCTAD objectives, the aims of the GSP are to increase the export revenue and promote the industrialisation of developing countries and consequently LDCs, and to accelerate their growth with a view to eradicating poverty;

4.  Underlines that GSP+ is a key EU trade policy instrument which provides better market access and is accompanied by a stringent monitoring mechanism to promote human and labour rights, environmental protection, and good governance in vulnerable developing countries;

5.  Notes that the current GSP Regulation has been in force for three years, since the start of the mid-term evaluation process, which has already identified elements to be considered for reform in the next GSP Regulation; welcomes the recommendations provided by the final mid-term evaluation report;

6.  Emphasises that the GSP, as part of the EU’s trade policy, must be built on the principles of EU external policy (effectiveness, transparency and values) as enshrined in Article 21 of the TEU; stresses that Article 208 of the TFEU establishes the principle of policy coherence for development, and sets the eradication of poverty as the main objective; stresses that the Commission’s Trade for All communication reaffirms these principles;

7.  Acknowledges the fact that GSP+ plays an important role in promoting international labour rights, human rights, good governance and environmental protection standards in its beneficiary countries, by not only offering incentives to comply with these standards but also establishing a platform for regular dialogue in the areas covered by the conventions and promoting engagement in substantive reforms;

8.  Acknowledges that the GSP scheme has brought economic gains to the beneficiary countries and the EU, with increased exports to the EU and improved preference utilisation rates by EBA and GSP+ beneficiaries; urges the EU to work on raising awareness of the GSP rules in the beneficiary countries in order to promote an even better uptake of the scheme; asks the Commission to assess the distribution of gains as regards the GSP scheme, where possible, based on the availability of data; takes note that, in some cases, increased exports and economic opportunities have also had unintended negative indirect impacts on fundamental rights and social development, for example leading to land grabbing or lack of compliance with labour rights; stresses, therefore, that trade preferences need to be followed by the implementation of international conventions and reforms so as to prevent the GSP programmes potentially leading to increased levels of environmental and social dumping;

9.  Welcomes the simplified GSP+ entry mechanism to make it more attractive for standard GSP beneficiary countries; highlights the fact that many of the candidate countries for GSP+ have ratified several of the international conventions needed for GSP+ admission; stresses that the improved, constant and systematic monitoring of the implementation process is of paramount importance, and can be achieved by stepping up cooperation between all actors so as to improve information gathering and in-depth analysis by using all the available information and resources, such as the reports from international monitoring bodies, including the UN, the ILO, the Organisation for Economic Cooperation and Development (OECD), and including direct involvement of civil society and social partners in the process; stresses that this is necessary in order to ensure the full potential of the GSP+ scheme to improve the situation with regard to workers’ rights, promotion of gender equality and the abolition of child and forced labour through the effective implementation of the 27 conventions;

10.  Urges the Commission to address the issues of shrinking space for civil society and protection for human rights defenders at risk when it engages with GSP+ beneficiary countries and through EBA enhanced engagement, as these issues are directly related to obligations under the International Covenant on Civil and Political Rights and relevant provisions of the ILO core conventions, in line with the Commission’s Trade for All communication; asks the Commission, furthermore, to explore further options for the structured, formal and independent participation of civil society, trade union representatives and the private sector, which could serve as potential avenues to strengthen the monitoring process;

11.  Emphasises that, overall, the GSP scheme appears to have created incentives for ratifying international conventions and has therefore created a better framework for progress; stresses the importance of further putting in place thorough measures to ensure that the GSP fosters positive environmental development; recommends that the Paris Agreement be added to the list of 27 core international conventions that GSP+ beneficiary countries must comply with; stresses that much progress remains to be made in beneficiary countries in order to achieve a sustainable development model;

12.  Acknowledges the progress made on effective implementation, achieved through increased monitoring and dialogue between the EU and the beneficiary countries, in particular when monitoring the implementation of the 27 core conventions; stresses the need for further coordination between the European External Action Service (EEAS), Union delegations, Member States’ diplomatic missions, beneficiary country governments, international organisations, businesses, social partners and civil society in order to improve information gathering and provide more in-depth analysis of the monitoring exercise; recommends, as far as possible, greater transparency and communication between co-legislators and stakeholders in the GSP withdrawal processes, in particular during the Commission’s investigation procedure;

13.  Acknowledges that ratification and progress on the effective implementation of relevant conventions are important benchmarks in order to achieve the necessary progress within the scheme; asks the Commission to ensure that the actions taken in order to monitor the effective implementation of conventions by beneficiary countries are fully in line with the country strategy papers, with a view to ensuring policy coherence, consistency and mainstreaming human rights into trade policy;

14.  Stresses the need for continued engagement and further improvement of transparency in GSP+ monitoring while ensuring that the EU can preserve its full leverage with beneficiary countries in this dialogue, notably around the scorecard exercise; calls on the Commission to consider further steps in this field and in the field of dialogue with beneficiary countries in order to increase the transparency, oversight and effectiveness of the scheme;

15.  Considers that any decision to suspend preferences must be completely consistent with the overarching objective of alleviating poverty and emphasises that acts of secondary EU law must be both designed and interpreted in line with primary EU law and general principles of EU law in this regard; stresses, therefore, the need for maintaining the current targeted approach for the withdrawal of preferences and ensuring that such withdrawal is limited to specific sectors and designed in such a way as to minimise the negative effects for the local population; calls on the Commission to make use of graduated withdrawals of trade preferences or other time-bound withdrawal measures where appropriate; stresses, finally, that the withdrawal of trade preferences should be seen as a measure of last resort applied only in cases of serious shortcomings in the effective implementation of the international conventions and a clear lack of willingness and engagement by the beneficiary country to address them; stresses, at the same time, the conditional nature of the schemes and that this conditionality should be used to preserve the credibility of each scheme and ensure action in cases of severe and systematic violations of the conventions;

16.  Welcomes the Commission’s recent decisions to launch the process for the withdrawal of EBA preferences for Cambodia and to send an emergency, high-level EU mission to Myanmar, in response to the human rights situation in both countries; expects the Commission to keep Parliament closely informed and involved in further steps, including with regard to the suspension of preferences;

17.  Notes that the number of beneficiary countries has significantly decreased due to the reformed eligibility criteria, which, together with product graduation, has resulted in an overall decrease in the volume of EU imports from GSP countries; acknowledges that these reforms allow preferences to be focused on the countries that are most in need; requests the Commission to ensure coherence and consistency between GSP and FTA regimes in the impact assessment for the next regulation, so as to ensure the central role of GSP for developing countries in the trade policy of the EU; notes in this regard that EBA beneficiary countries are facing increasing competitive pressure from countries that have established FTAs with the EU; notes, furthermore, that some countries previously subject to GSP+ monitoring are now covered by FTAs that include trade and sustainable development chapters, which should be effective and enforceable;

18.  Regrets the fact that the GSP scheme, notably in the case of 29 EBA countries, has not led to any change, and, in some cases a deterioration in their export diversification profiles at the product level; further regrets the fact that it has not sufficiently contributed to economic diversification; calls for further measures to be taken in order to enhance the diversification of exports from GSP countries; regrets the fact that diversification among beneficiaries seems to have been hampered by removing the possibility of cumulation with countries that have graduated from GSP, as they can no longer benefit from the rules of origin for GSP beneficiaries; firmly calls for this possibility to be reintroduced, especially for the most vulnerable countries; notes the significant decrease in export diversification at all sector levels for standard GSP beneficiaries; further calls on the Commission to consider reforming and expanding the list of products to be covered by the Regulation with regard to semi-finished and finished products in particular, and, where necessary, easing rules of origin for the most vulnerable countries; further encourages GSP beneficiary countries to introduce effective measures aimed at product diversification; in this sense, underlines the need to create access to knowledge and technology in order to diversify products so the exports can sustain themselves in global competition, and in Europe in particular;

19.  Calls on GSP beneficiary countries to put in place and effectively implement legal measures to protect intellectual property;

20.  Welcomes the fact that the preference utilisation rate for EBA beneficiaries is high; stresses the importance of capacity building in the beneficiary countries to support them in benefiting the most from the scheme; calls for measures under the Aid for Trade initiative to be more effectively used in this regard; takes the view that consideration should be given to including services in the next GSP regulation in order to further promote increased diversification; stresses, furthermore, in this context the importance of a business-to-business approach; calls for the setting up of sectoral, multi-stakeholder platforms and online facilities, which bring together export companies from GSP beneficiary countries, import companies in the EU and potential newcomers on both sides – those who are currently not exporting or not importing – in order to exchange best practices and to raise awareness of the GSP rules, conditions and economic perspectives it offers;

21.  Welcomes the conclusion of the first safeguard investigation under the regulation, and considers that this clause should ensure that the EU’s financial, economic, social and environmental interests are protected; stresses that when offering preferences for sensitive products, there is a need to allow them to be given special treatment in order to avoid putting certain sectors at risk;

22.  Emphasises that all parts of the territory of the beneficiary countries, including EPZs, are covered by the scheme and the obligations resulting from the ratification of the relevant conventions; urges beneficiary countries to effectively implement labour standards, and urges the Commission to address violations of ILO standards, including collective bargaining and freedom of association in EPZs situated in current or potential beneficiary countries, and to ensure that any carve-outs are removed; calls on the Commission to explore means to ensure that products from EPZs do not fall under the scheme of preferences insofar as they are exempt from national legislation and in breach of the relevant international conventions;

23.  Highlights that the GSP has made the corporate sector more dynamic, contributed to women’s economic empowerment to a certain extent and favoured their participation in the labour force, in particular in the industries of the export countries that trade with the EU; stresses in this sense that is important to create suitable business environments for women in order for them to capitalise on these new skills and experiences and be able to move up in companies’ structures or be able to set up their own new enterprises; nevertheless notes that women continue to be discriminated against, and is concerned about women’s working conditions, especially in the textiles and apparel sector; reiterates Parliament’s resolution of 27 April 2017 on the EU flagship initiative on the garment sector[16], and calls on the Commission to follow up on this;

24.  Welcomes the effect that the GSP has had on adopting cleaner and safer technologies and on voluntary corporate social responsibility initiatives, which has had a direct positive impact on workers and the environment; takes the view that measures to further encourage and reliably assess this development should be planned; recognises the need to strike the correct balance between regulatory and voluntary action on corporate due diligence in this regard, and calls on the Commission to explore ways to establish due diligence obligations;

25.  Considers that the EU should ensure policy coherence by encouraging other international actors, such as multinational enterprises, to participate fully in the improvement of human rights, social rights and environmental standards worldwide, not least by obliging economic operators to put in place due diligence practices in line with the UN Guiding Principles for Business and Human Rights; calls on the Commission to show leadership in order to ensure that human rights and labour rights are upheld in global value chains and to report on the implementation of Parliament’s 2016 resolution on the implementation of its recommendations on social and environmental standards, human rights and corporate responsibility, including its call to include corporate social responsibility (CSR) in the Regulation and to reform WTO rules to institute supply chain due diligence and transparency requirements, building on the UN Guiding Principles for Business and Human Rights;

26.  Recalls that the EU must encourage, in the interests of coherence with the policies of other international players, such as multinationals, full participation in improving respect for human rights, children’s rights, social rights, environmental rights and public health in the world; calls for the EU to ensure that human rights are respected in relation to the right to work in global value chains, i.e. throughout the supply chain;

27.  Calls on the Commission, as regards to the next GSP regulation, to explore the possibility of introducing additional tariff preferences for products that have demonstrably been produced sustainably; considers that the goods should be submitted on a voluntary basis for certification of their sustainable mode of production and that proof thereof should be produced upon import into the EU;

28.  Instructs its President to forward this resolution to the Council and the Commission.

• [1]  OJ L 303, 31.10.2012 p. 1.
• [2]  OJ L 181, 29.6.2013, p. 13.
• [3]  OJ C 55, 12.2.2016, p. 112.
• [4]  http://trade.ec.europa.eu/doclib/docs/2018/october/tradoc_157434.pdf
• [5]  COM(2018)0665.
• [6]  SWD(2018)0430.
• [7]  COM(2016)0029.
• [8]  COM(2018)0036.
• [9]  https://www.ombudsman.europa.eu/en/decision/en/64308
• [10]  OJ C 101, 16.3.2018, p. 19.
• [11]  Texts adopted, P8_TA(2018)0515
• [12] OJ C 298, 23.8.2018, p. 100.
• [13] OJ C 331, 18.9.2018, p. 100.
• [14]  OJ C 337, 20.9.2018, p. 33.
• [15]  http://www.europarl.europa.eu/RegData/organes/conf_pres_groupes/proces_verbal/2002/12-12/CPG_PV(2002)12-12(ANN01)_EN.doc
• [16]  OJ C 298, 23.8.2018, p. 100.

OPINION of the Committee on Foreign Affairs (22.1.2019)

for the Committee on International Trade

on the implementation of the GSP Regulation (EU) No 978/2012
(2018/2107(INI))

Rapporteur for opinion: Pier Antonio Panzeri

SUGGESTIONS

The Committee on Foreign Affairs calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

A.  whereas Article 21 of the Treaty on European Union (TEU) sets out the EU’s obligation to ensure consistency between the different areas of its external action, including its trade and human rights policies, thus mutually enhancing the potential effectiveness of these policies; whereas Article 3(5) TEU states that the EU shall contribute, inter alia, to sustainable development, the eradication of poverty and the protection of human rights;

B.  whereas EU trade policy must help to promote the values for which the Union stands, set out in Article 2 TEU, and contribute to the pursuit of the aims listed in Article 21 TEU, including the consolidation of democracy and the rule of law, respect for human rights, fundamental rights and freedoms, equality, respect for human dignity and the protection of the environment and of social rights; whereas the Generalised Scheme of Preferences (GSP), GSP+ and Everything But Arms (EBA) systems can be essential tools which enable these values to be upheld, and whereas it is important that they are implemented and monitored effectively;

C.  whereas in its resolution of 5 July 2016 on the implementation of its 2010 recommendations on social and environmental standards, human rights and corporate responsibility[1], Parliament proposed: introducing corporate social responsibility into the GSP Regulation (hereinafter ‘the Regulation’); ensuring that transnational corporations comply with human and labour rights; and reforming WTO rules to introduce supply chain due diligence and transparency requirements, building on the UN Guiding Principles for Business and Human Rights;

D.  whereas the GSP has become an instrument of political leverage applied by the European Union and its Member States to garner the support of third countries for various aspects of their international agendas; whereas the European Union should promote different trading models based on equality between partners;

1.  Asserts that GSP has proven to be an important tool for the promotion and protection of core human rights and the principles of sustainable development; welcomes the acknowledgement of the need to enhance transparency and accountability by the meaningful participation of civil society and other actors such as social partners, Parliament and the Council in monitoring the effective implementation of human rights commitments under the GSP+ scheme; calls for a structured monitoring mechanism to ensure compliance with the relevant GSP conventions, which should also apply to the GSP general arrangement and the EBA; calls on the Commission to consider more permanent structures for civil society involvement, such as by establishing joint oversight commissions or domestic advisory groups with the participation of local civil society, human rights defenders and trade union representatives;

2.  Recalls the importance of continued engagement with the relevant international organisations and monitoring bodies established under the relevant conventions, such as those of the International Labour Organisation (ILO), OECD and UN, and of supporting local civil society organisations which play a role in defending the interests of marginalised communities, including persons with disabilities;

3.  Stresses that the monitoring and evaluation of GSP+ should take into account the reports of international monitoring bodies, such as the UN, the ILO and international NGOs, and their recommendations for each country under each convention, and should seek to ascertain that the Regulation is being implemented effectively;

4.  Regrets the fact that the scorecards used for the monitoring of GSP+ beneficiary countries remain confidential; calls on the Commission to make GSP+ assessments for eligibility and the scorecards publicly available in order to increase the transparency and oversight of the scheme;

5.  Acknowledges the fact that GSP+ plays an important role in promoting international labour rights, human rights, good governance and environmental protection standards in its beneficiary countries, by not only offering incentives to comply with these standards but also establishing a platform for regular dialogue in the areas covered by the conventions and promoting engagement in substantive reforms;

6.  Recalls the potential of the GSP+ scheme to improve the situation with regard to human rights, sustainable development and good governance, including workers’ rights, the abolition of child labour and forced labour, the promotion of gender equality, a restricted application of the death penalty that abides by all obligations laid down in international conventions, civil and political rights, freedom of religion and freedom of expression, and the protection of the environment; recalls that the scheme’s full potential can only be fulfilled if reporting requirements and monitoring mechanisms for the effective implementation of the obligations under the 27 conventions required for the granting of trade preferences under GSP+ are improved and the incentive of trade preferences is accompanied by other support measures, based on all the information needed to assess compliance with the binding commitments; stresses the need for an impact assessment of human and labour rights, in consultation with civil society;

7.  Calls on the Commission to work harder with beneficiary countries, the European External Action Service (EEAS), EU Delegations, Member States’ diplomatic missions, international organisations, businesses, social partners and civil society, in order to improve its information gathering and provide more in-depth analysis of the monitoring exercise so that the implementation of all aspects of the system can be clearly evaluated;

8.  Calls for ILO Convention 169 on Indigenous and Tribal Peoples to be included as one of the fundamental binding conventions that condition the granting of trade preferences;

9.  Underlines the fact that progress at a legislative level has not yet been matched by progress at the level of implementation in many beneficiary countries;

10.  Stresses that the local involvement of civil society organisations is essential in order to assert interests effectively, and calls on the Commission to examine objectively, and in a comparable manner, the shrinking space for civil society, and to address threats to independent trade unions, risks and threats to human rights defenders and obstacles to EU funding to NGOs in scorecards and GSP+ dialogues, as these issues are directly related to legal obligations under the International Covenant on Civil and Political Rights and the relevant provisions of the ILO core conventions; urges the Commission, once again, to continue to fund civil society initiatives that monitor the implementation of this scheme;

11.  Stresses that human rights defenders should be able to perform their task freely and unhindered and that the circumstances of their duties should be benchmarked in the assessment of GSP+ compliance;

12.  Recommends, within the framework of the review of the Regulation, that the conventions currently listed under GSP+ be extended to EBA and GSP beneficiary countries; reiterates its call for the Rome Statute of the International Criminal Court to be included in the list of conventions required for GSP+ status;

13.  Recalls the importance of establishing clear benchmarks pertinent to each country’s problems and shortcomings in order to assess the effective implementation of the 27 international conventions and, as appropriate, of systematically including these benchmarks in the human rights country strategy papers with a view to ensuring policy coherence;

14.  Calls for the establishment of an independent complaints mechanism and body within the GSP scheme which would allow all interested parties, including local stakeholders, to submit complaints concerning alleged labour and human rights violations committed by states or corporations that benefit from trade preferences under the Regulation;

15.  Calls on the Commission to address labour standards, including collective bargaining and freedom of association, in Export Processing Zones (EPZs) situated in current or potential beneficiary countries; calls on the Commission, furthermore, to ensure that carve-outs are removed from labour rights protections in EPZs and to establish a long-term road map with the partner countries concerned;

16.  Expresses concern about reports of the GSP+ scheme contributing to landgrabbing and other human rights violations; calls on the Commission to address such negative consequences effectively and to ensure that adequate mitigation and redress measures are in place;

17.  Supports more engagement with least developed countries under the EBA scheme with regard to preventing and addressing cases of serious and systematic violation of human rights; calls, in this regard, for the EBA scheme’s scoreboard system to be extended; considers that the threat of withdrawal of trade preferences needs to be accompanied by suitable political initiatives and assistance in order to ensure that the beneficiary countries genuinely comply with international human rights commitments;

18.  Considers that any decision to suspend preferences must be completely consistent with the overarching objective of alleviating poverty and that if a partial suspension method is chosen, it should be designed in such a way as to minimise the negative effects for the local population; stresses that the withdrawal of trade preferences should be seen as a measure of last resort applied only in cases of serious shortcomings in the effective implementation of the international conventions and a clear lack of willingness and engagement by the EBA beneficiary country to address them;

19.  Welcomes the Commission’s recent decisions to launch the process for the withdrawal of EBA preferences for Cambodia and to send an emergency, high-level EU mission to Myanmar, in response to the human rights situation in both countries; expects the Commission to keep Parliament closely informed and involved in further steps, including with regard to the suspension of preferences;

20.  Considers that the EU should ensure policy coherence by encouraging other international actors, such as multinational enterprises, to participate fully in the improvement of human rights, social rights and environmental standards worldwide, not least by obliging economic operators to put in place due diligence practices in line with the UN Guiding Principles for Business and Human Rights; calls on the Commission to show leadership in order to ensure that human rights and labour rights are upheld in global value chains, and to report on the implementation of Parliament’s 2016 resolution on the implementation of its recommendations on social and environmental standards, human rights and corporate responsibility, including its call to include corporate social responsibility (CSR) in the Regulation and to reform WTO rules to institute supply chain due diligence and transparency requirements, building on the UN Guiding Principles for Business and Human Rights;

21.  Calls on the Commission to establish an inter-institutional task force on business and human rights and to initiate mandatory EU due diligence legislation without further delay;

22.  Calls on the Commission to modify the standard GSP and EBA schemes in the new Regulation after 2023 in order to authorise the blacklisting of companies responsible for serious human rights violations that wish to export to the EU.

INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION

Date adopted	22.1.2019
Result of final vote	+: –: 0:	50 2 6
Members present for the final vote	Michèle Alliot-Marie, Francisco Assis, Petras Auštrevičius, Amjad Bashir, Goffredo Maria Bettini, Mario Borghezio, Klaus Buchner, James Carver, Aymeric Chauprade, Javier Couso Permuy, Arnaud Danjean, Georgios Epitideios, Knut Fleckenstein, Eugen Freund, Michael Gahler, Sandra Kalniete, Manolis Kefalogiannis, Wajid Khan, Andrey Kovatchev, Eduard Kukan, Ilhan Kyuchyuk, Ryszard Antoni Legutko, Barbara Lochbihler, Sabine Lösing, Andrejs Mamikins, Ramona Nicole Mănescu, David McAllister, Clare Moody, Pier Antonio Panzeri, Demetris Papadakis, Ioan Mircea Paşcu, Tonino Picula, Julia Pitera, Cristian Dan Preda, Jozo Radoš, Alyn Smith, Jordi Solé, Dobromir Sośnierz, Dubravka Šuica, Charles Tannock, László Tőkés, Ivo Vajgl, Geoffrey Van Orden, Anders Primdahl Vistisen
Substitutes present for the final vote	Asim Ademov, Doru-Claudian Frunzulică, Elisabetta Gardini, Rebecca Harms, Patricia Lalonde, Juan Fernando López Aguilar, Antonio López-Istúriz White, Bodil Valero, Marie-Christine Vergiat, Janusz Zemke, Željana Zovko
Substitutes under Rule 200(2) present for the final vote	Norbert Erdős, Axel Voss, Martina Werner

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

50	+
ALDE	Petras Auštrevičius, Ilhan Kyuchyuk, Patricia Lalonde, Jozo Radoš, Ivo Vajgl
ECR	Amjad Bashir, Ryszard Antoni Legutko, Charles Tannock, Anders Primdahl Vistisen
EFDD	Aymeric Chauprade
PPE	Asim Ademov, Michèle Alliot-Marie, Arnaud Danjean, Norbert Erdős, Michael Gahler, Elisabetta Gardini, Sandra Kalniete, Manolis Kefalogiannis, Andrey Kovatchev, Eduard Kukan, Antonio López-Istúriz White, David McAllister, Ramona Nicole Mănescu, Julia Pitera, Cristian Dan Preda, Dubravka Šuica, László Tőkés, Axel Voss, Željana Zovko
S&D	Francisco Assis, Goffredo Maria Bettini, Knut Fleckenstein, Eugen Freund, Doru-Claudian Frunzulică, Wajid Khan, Juan Fernando López Aguilar, Andrejs Mamikins, Clare Moody, Pier Antonio Panzeri, Demetris Papadakis, Ioan Mircea Paşcu, Tonino Picula, Martina Werner, Janusz Zemke
VERTS/ALE	Klaus Buchner, Rebecca Harms, Barbara Lochbihler, Alyn Smith, Jordi Solé, Bodil Valero

2	-
EFDD	James Carver
NI	Georgios Epitideios

6	0
ECR	Geoffrey Van Orden
ENF	Mario Borghezio
GUE/NGL	Javier Couso Permuy, Sabine Lösing, Marie-Christine Vergiat
NI	Dobromir Sośnierz

Key to symbols:

+  :  in favour

-  :  against

0  :  abstention

• [1]  OJ C 101, 16.3.2018, p. 19.

OPINION of the Committee on Development (24.1.2019)

for the Committee on International Trade

on the implementation of the GSP Regulation (EU) No 978/2012
(2018/2107(INI))

Rapporteur for opinion: Frank Engel

SUGGESTIONS

The Committee on Development calls on the Committee on International Trade, as the committee responsible, to incorporate the following suggestions into its motion for a resolution:

1.  Welcomes the Commission’s Mid-Term Evaluation of the EU’s Generalised Scheme of Preferences (GSP); welcomes the fact that the new regulation has seen an increase in exports from beneficiaries of the Everything But Arms (EBA) and GSP+ arrangements, which is an important contributing factor towards poverty eradication;

2.  Emphasises that the EU’s trade policy must be built on the principles of EU external policy (effectiveness, transparency and values); whereas Article 208 of the TFEU establishes the principle of policy coherence for development and sets the eradication of poverty as the main objective;

3.   Notes with satisfaction that in 2016 EUR 62.6 billion worth of imports entered the EU under GSP preferences (a rising tendency), broken down as follows: EUR 31.6 billion from standard GSP beneficiaries, around EUR 7.5 billion from GSP+ beneficiaries and EUR 23.5 billion from EBA beneficiaries (Eurostat data as of September 2017);

4.  Recalls that the GSP helps industries in developing countries overcome the difficulties these countries face on export markets as a result of high initial costs; recalls that, in line with Unctad objectives, the aims of the GSP are to increase the export revenue and promote the industrialisation of developing countries and consequently least developed countries (LDCs), and to accelerate their growth with a view to eradicating poverty;

5.  Underlines that GSP+ is a key EU trade policy instrument which provides better market access and is accompanied by a stringent monitoring mechanism to promote human and labour rights, environmental protection, and good governance in vulnerable developing countries;

6.  Welcomes the fact that the preference utilisation rate for EBA beneficiaries is high; recalls that market access alone is not enough to reduce poverty and inequalities in LDCs; stresses therefore that EBA should be complemented with development aid as well as trade-related assistance and capacity-building if it is to become more effective; notes in particular that greater effort is needed to tackle issues such as land grabbing and environmental degradation in the context of EBA;

7.  Regrets that the Mid-Term Evaluation indicates that the GSP had only a limited impact on sustainable development and environmental protection; in particular, notes with concern that the production and trade of textiles and clothing, which are the main import products under the GSP, have accelerated environmental degradation in beneficiary countries in the absence of adequate environmental and waste management mechanisms[1]; expects the GSP mid-term review to further encourage the EU’s trade partners to adopt higher social, labour and environmental standards, which could be achieved through incentives such as additional tariff preferences for sustainably produced products;

8.  Takes note of the assessments which argue that the GSP has by and large contributed to social development and human rights, in particular employment of women, fundamental rights and labour rights, observation of environmental standards, implementation of good governance practices, including combating drugs, corruption, money laundering and terrorism, and ratification of core ILO conventions; urges the Commission to intensify dialogue with partner countries on these issues in order to ensure continuous progress;

9.  Recalls, however, that the GSP is an incentive-based regime which must be used consistently in order to be effective; regrets that investigations into alleged non-compliance with the requirements have not been launched in a coherent or timely manner; believes that temporary withdrawal of tariff preferences in the event of severe and systematic violations of fundamental rights should be consistently and effectively used; stresses the importance of continued engagement and monitoring, together with greater participation of civil society in these processes;

10.  Urges the Commission to take swifter, more decisive action on alleged violations of human or labour rights under the requirements of the GSP; calls for the establishment of a mechanism that can be invoked by individuals or groups that have been negatively affected by the implementation of the GSP;

11.  Calls for greater support to be given to GSP+ beneficiary countries to reverse the trend of decreasing product diversification; is of the opinion that the more intensified GSP+ monitoring system, alongside the findings of UN and ILO monitoring bodies and information provided by third parties, has contributed to the fact that all GSP+ beneficiaries are making progress in implementing the 27 conventions; calls on the Commission to step up its efforts to improve transparency of the EU’s GSP+ monitoring, the mechanism for which should apply equally to GSP and EBA beneficiary countries;

12.  Notes with concern that there is no conditionality to propel GSP and EBA beneficiary countries to adhere to environmental standards and to comply with international conventions on climate change and environmental protection; takes the view that the list of conventions on core human and labour rights and on environmental and governance principles should be updated in the next reform of the GSP Regulation, notably by including as a new conditionality the ratification and effective implementation of the Paris Agreement on climate change, more broadly, calls on the Commission to provide technical support to improve environmental protection in the implementation of each of the three GSP arrangements;

13.  Recalls that the EU must encourage, in the interests of coherence with the policies of other international players, such as multinationals, full participation in improving respect for human rights, children’s rights, social rights, environmental rights and public health in the world; calls for the EU to ensure that human rights are respected in relation to the right to work in global value chains, i.e. throughout the supply chain;

14.  Recalls that the GSP covers the textile and clothing production sector more than any other, that the low investment costs and availability of low-skilled jobs mean that the textile and clothing industries are an important sector in terms of the industrialisation of LDCs, and that textiles and clothing play a key role in the empowerment of women; calls for the EU to establish a legally binding due diligence framework for companies and to extend the models developed in the context of conflict minerals, particularly in terms of transparency and traceability, to the textile sector;

15.  Calls for greater participation in the monitoring process from civil society and development agencies;

16.  Stresses the importance of capacity-building in the beneficiary countries to reduce supply-side constraints on diversification and preference usage; calls for measures under Aid-for-Trade to be used more effectively in this regard.

INFORMATION ON ADOPTION IN COMMITTEE ASKED FOR OPINION

Date adopted	22.1.2019
Result of final vote	+: –: 0:	20 0 1
Members present for the final vote	Mireille D’Ornano, Doru-Claudian Frunzulică, Enrique Guerrero Salom, Maria Heubuch, Teresa Jiménez-Becerril Barrio, Linda McAvan, Norbert Neuser, Vincent Peillon, Lola Sánchez Caldentey, Elly Schlein, Bogusław Sonik, Eleni Theocharous, Anna Záborská, Joachim Zeller, Željana Zovko
Substitutes present for the final vote	Marina Albiol Guzmán, Agustín Díaz de Mera García Consuegra, Frank Engel, Stefan Gehrold, Maria Noichl, Judith Sargentini

FINAL VOTE BY ROLL CALL IN COMMITTEE ASKED FOR OPINION

20	+
ECR	Eleni Theocharous
GUE/NGL	Marina Albiol Guzmán, Lola Sánchez Caldentey
PPE	Agustín Díaz de Mera García Consuegra, Frank Engel, Stefan Gehrold, Teresa Jiménez-Becerril Barrio, Bogusław Sonik, Anna Záborská, Joachim Zeller, Željana Zovko
S&D	Doru-Claudian Frunzulică, Enrique Guerrero Salom, Linda McAvan, Norbert Neuser, Maria Noichl, Vincent Peillon, Elly Schlein
VERTS/ALE	Maria Heubuch, Judith Sargentini

0	-

1	0
EFDD	Mireille D’Ornano

Key to symbols:

+  :  in favour

-  :  against

0  :  abstention

• [1]  See Mid-Term Evaluation of GSP, cited above.

INFORMATION ON ADOPTION IN COMMITTEE RESPONSIBLE

Date adopted	19.2.2019
Result of final vote	+: –: 0:	36 2 1
Members present for the final vote	Laima Liucija Andrikienė, Maria Arena, Tiziana Beghin, Daniel Caspary, Santiago Fisas Ayxelà, Christofer Fjellner, Karoline Graswander-Hainz, Heidi Hautala, Nadja Hirsch, France Jamet, Jude Kirton-Darling, Patricia Lalonde, Bernd Lange, David Martin, Emma McClarkin, Anne-Marie Mineur, Sorin Moisă, Godelieve Quisthoudt-Rowohl, Inmaculada Rodríguez-Piñero Fernández, Kārlis Šadurskis, Marietje Schaake, Helmut Scholz, Joachim Schuster
Substitutes present for the final vote	Klaus Buchner, Ramona Nicole Mănescu, Georg Mayer, Ralph Packet, Bolesław G. Piecha, Fernando Ruas, Lola Sánchez Caldentey, Wim van de Camp, Jarosław Wałęsa
Substitutes under Rule 200(2) present for the final vote	Georges Bach, Malin Björk, Ramón Jáuregui Atondo, Bernd Kölmel, Julia Pitera, Mirja Vehkaperä, Marco Zanni

FINAL VOTE BY ROLL CALL IN COMMITTEE RESPONSIBLE

36	+
ALDE	Nadja Hirsch, Patricia Lalonde, Marietje Schaake, Mirja Vehkaperä
ECR	Bernd Kölmel, Emma McClarkin, Ralph Packet, Bolesław G. Piecha
EFDD	Tiziana Beghin
GUE/NGL	Malin Björk, Anne-Marie Mineur, Lola Sánchez Caldentey, Helmut Scholz
PPE	Laima Liucija Andrikienė, Georges Bach, Wim van de Camp, Daniel Caspary, Santiago Fisas Ayxelà, Christofer Fjellner, Ramona Nicole Mănescu, Sorin Moisă, Julia Pitera, Godelieve Quisthoudt-Rowohl, Fernando Ruas, Kārlis Šadurskis, Jarosław Wałęsa
S&D	Maria Arena, Karoline Graswander-Hainz, Ramón Jáuregui Atondo, Jude Kirton-Darling, Bernd Lange, David Martin, Inmaculada Rodríguez-Piñero Fernández, Joachim Schuster
VERTS/ALE	Klaus Buchner, Heidi Hautala

2	-
ENF	France Jamet, Marco Zanni

1	0
ENF	Georg Mayer

Key to symbols:

+  :  in favour

-  :  against

0  :  abstention