Verbatim report of proceedings

Tuesday, 14 November 2006 - Strasbourg

20. The European Union's Generalised System of Preferences (debate)

  President. – The next item is the Commission statement on the European Union’s generalised system of preferences.

  Peter Mandelson, Member of the Commission. Mr President, I am happy to share with you further reflections on the GSP+ scheme and the philosophy behind it. It is an important EU development tool: it contributes to economic progress in developing countries and the reduction of poverty, while taking on board the enduring need for promoting core human and labour rights, as well as sustainable development and governance principles.

One of the key priorities of EU trade policy is to be consistent with and to consolidate the objectives of development policy, in particular the promotion of sustainable development and good governance. This goal has been given greater prominence in the GSP+ scheme, which aims at encouraging developing countries to comply with international standards relating to social rights, environmental protection and governance, including the fight against drugs.

It is worth recalling that the criteria on which the granting of GSP+ is based are objective and transparent and have been made public in the regulation itself – this is in line with our WTO obligations. The success of the GSP+ scheme is that it provides an incentive for the applicant countries to ratify key ILO conventions in order to comply with the criteria of the GSP+.

It has played an instrumental role in the case of El Salvador, which deposited the ratification instruments of the missing ILO conventions on 6 September 2006. The ILO supervisory committees reported that most of the GSP+ applicant countries have made substantial changes to their legal systems in order to comply fully with the rights enshrined in the ILO conventions, which was the precondition for being granted GSP+ trade preferences in the first place.

The GSP+ system is an instrument of encouragement and support. It cannot solve everything at once; its role is to give an incentive, as I say, not to punish, and to maintain the momentum of reform. The aim is also to integrate the GSP+ beneficiaries into the world trading system. I am convinced that integration into the world trading system will further help these countries to advance towards greater respect for the principles enshrined in the conventions and to lock in essential reforms.

Following the ratification of these conventions, it is clear that actual implementation then needs to be monitored. Progress in the implementation of the GSP+ conditionality is assessed in relation to developments in government policy, to administrative capacity and other institutional, legal and budgetary constraints. Some of these can only improve over time.

Regarding monitoring, the EU relies in its judgments, in particular with regard to the initiation of any withdrawal procedure, on the monitoring procedures and expertise of relevant specialised monitoring bodies, such as the ILO, for which the EU itself cannot be a substitute.

However, we also have our own role to play in the proper application of the GSP system. Therefore, whenever the Commission receives information from trade unions or other stakeholders about serious and systemic systematic violations of relevant international standards, it thoroughly examines whether appropriate action in line with the GSP regulation may be taken. This is well coordinated, with relevant monitoring bodies, and Parliament should be regularly updated on developments.

I would like to stress the important role the European Parliament and parliaments in the relevant countries can play, both in monitoring the situation and in helping to bring forward implementing legislation in the countries concerned and ensuring its effective implementation.

Let me say to Members of this House: your interparliamentary contacts are very valuable for sending this important message and I am ready to engage in an even closer cooperation with you with a view to this end.

  Godelieve Quisthoudt-Rowohl, on behalf of the PPE-DE Group. – (DE) Mr President, the Generalised System of Preferences has proved its worth, as it actively supports countries in their efforts towards sustainable development and good governance. We trade with these countries and also negotiate with them on equal terms. We open up our markets to them, which also gives rise to competition – only in the medium term, if need be. In other words, it is in our own interests, too, to ensure compliance with the rules and conventions of the United Nations and the International Labour Organization. In this respect, we fully support the Commission’s endeavours.

We also ask, however – and the Commissioner has already indicated that he is prepared to do this – that the Commission keep us informed on a regular basis. This relates to, firstly, its observations on the implementation of the various regulations in the beneficiary countries, secondly, any sanctions pursuant to Article 16 and, thirdly, a mid-term review of the effectiveness of the GSP+ rules. GSP+ should put us in a position to provide support whilst also benefiting from trade with these countries. At the same time, we should take account of the legitimate interests of our economy and labour market and strike a balance between these two objectives.

  Antolín Sánchez Presedo, on behalf of the PSE Group. – (ES) Mr President, ladies and gentlemen, I fully agree with Commissioner Mandelson’s statement and, as rapporteur for the report on the generalised system of preferences, I would also stress the importance of GSP+ as an incentive to commit the more vulnerable countries to sustainable development and good governance.

I take a positive view of the Commission’s decision of 21 December to grant benefits to fifteen countries that requested it and the steps taken subsequently by countries such as Colombia, Venezuela and El Salvador, ratifying important ILO conventions.

With regard to the functioning of the system, I would like to mention three fundamental issues. Firstly, the aim of GSP+ is to promote, amongst other things, human and labour rights through trade. This association is essential and must not be squandered. Trade must provide an incentive in terms of human and labour rights. We must ensure that protectionist tendencies do not undermine this aim.

Secondly, in order to ensure that the system is successful, the number of benefiting countries must be increased. One of the Commission’s priorities must be to ensure that that number increases significantly, since those countries currently represent just 3% of the world population.

Thirdly, the effectiveness of the system must be guaranteed, by ensuring that it is applied intelligently, with the participation of the European Parliament. It is important that the Commission cooperate with the benefiting countries in their efforts to meet their commitments, by means of various initiatives and, in particular, by strengthening the rigorous and regular control and assessment of their implementation, transparently and with the participation of the main social actors and benefiting countries, as stated in Parliament’s report.

Furthermore, the sanctions provided for must be applied in the event of serious and systematic violations of the principles. Those violating them must be punished, but not operators who are fulfilling their commitments properly.

Finally, as the motion for a resolution reiterates, the Commission, before the next review of the Regulation, must carry out a study to assess the impact of the system, to analyse its operation and to lay the foundations for the reforms carried out.

  Sajjad Karim, on behalf of the ALDE Group. – Mr President, the GSP scheme was designed to help the poorest and most vulnerable in the world trade their way out of poverty. There is not a fixed list of countries that fit into that category. Where the GSP is a success, a country may graduate to a new relationship with the EU. However, not all movement is upward: some countries, through circumstances entirely beyond their control, may now be in a worse position than when the scheme was renewed.

Pakistan is such a country. Despite the backing of this House, Pakistan was denied GSP+ status by the Council, at a cost of 300 000 jobs and GBP 40 million a year. Tragically, less than six months after the GSP scheme came into force, Pakistan and much of Pakistan-administered Kashmir was devastated by an earthquake that the World Health Organisation claims eclipsed the tsunami in terms of destruction and human suffering.

The major impact of the earthquake in the north-east of the region caused large-scale displacement of Pakistan’s skilled and unskilled labour force. They have traditionally provided a significant part of the workforce for the whole of Pakistani industry, notably in textiles. Many were left homeless, without spouses and with children to care for. Over one year later, they have been unable to return to paid work because they have been waiting for financial grants to rebuild their homes. As a result industrial wages have increased, driving up the cost of production and dramatically effecting Pakistan’s competitiveness.

Whilst the EU is always very generous in terms of the aid we offer to those countries in need, our pockets are not bottomless. We must revise the GPS in order to make sure that we not only help the poor trade their way out of poverty, but also help the hopeless trade their way out of the rubble of disaster.

  Caroline Lucas, on behalf of the Verts/ALE Group. – Mr President, in order to be credible and genuinely effective, we have to demonstrate that the GSP+ scheme is working properly. In other words, the EU must act swiftly and decisively when there are infringements of the social or environmental standards in question. This is not merely a theoretical or academic discussion, but a very real discussion about real countries.

The case of El Salvador has already been raised. In fact, El Salvadorian workers have for years seen incredible resistance by their own Government, company owners and the right-wing media to try to avoid, or at least delay, the implementation of core labour conventions, and it is very unfortunate that an EU Member State, Spain, has seemingly supported them in that attempt.

However, the fact that the El Salvadorian Government has recently ratified four key ILO conventions is not the real victory it might seem, because by reforming its civil service laws the Government has actually succeeded in removing large numbers of workers from any possible benefits of those ILO conventions. That is totally unacceptable, and I therefore formally ask the Commission to initiate without delay an investigation into the situation in El Salvador and to consider a temporary withdrawal of GSP preferences. I would be happy to furnish the Commissioner with further details from the trade union groups and civil societies in El Salvador.

Colombia is another case of blatant violation of workers’ rights, despite the window dressing of official enshrinement of ILO conventions. The monthly and often weekly reports of trade union members ‘disappearing’ and being killed tell the true story of the blood toll paid by those who dare to assume that ILO rights officially adopted in theory will actually be respected in practice. We cannot wait until December 2008 before we review these cases. I ask the Commission to review them now.

  Jan Andersson (PSE). – (SV) Mr President, Commissioner, the Generalised System of Preferences, GSP+, is a good system that grants privileges to countries in the developing world in respect of their access to European markets, which is an enormously positive thing. There, are, however, a number of strings attached. It is right for Commissioner Mandelson to say that these countries should first and foremost be given encouragement and support. Nonetheless, situations can arise where it is not enough to provide encouragement and support and where, in addition, there is a real need to tighten up on monitoring and perhaps use the tools available if the conditions in the conventions on workers’ rights, and the like, are not met. We know that infringements are taking place today, and we therefore want the Commission to tighten up monitoring and, where necessary, use the tools available to temporarily suspend offending countries.

When such steps are taken, we would further desire the involvement of Parliament in the process, so that we can give our views and work together in order to make the system work. This must happen now. As many other speakers have pointed out, it is also important to carefully review a few points before we evaluate the system in 2008, namely: has the system worked in every respect, what shortcomings does it have and what do we need to consider when we renew the system?

  Kader Arif (PSE). – (FR) Mr President, Commissioner, ladies and gentlemen, by adopting the Council regulation of 27 June 2005 reforming the system of preferences that has been in force since 1971, the European Union has chosen to simplify and enhance its principal trade instrument for supporting developing countries.

Thus, three systems shall apply from now on: the general system, the Everything but Arms system – which is a tool adapted to the specific characteristics of the least-advanced countries – and, lastly, the GSP+. The additional preferences granted under this last heading arose out of the firm belief that development can be considered only in close conjunction with the democratic process and with respect for human rights, labour law and the environment. Fifteen countries are currently benefiting from this mechanism, which both encourages and rewards those developing countries that are most vulnerable and that make the most efforts in these areas.

However, if the GSP+ is to genuinely contribute to better governance and to greater respect for the environment, human rights and employment, it must be managed effectively, and that means, firstly, warning countries that are not fulfilling their commitments – of which there are still many – and, above all, making routine threats so as to effectively do away with the preferences granted to those who seriously and systematically violate the ILO conventions and who do not honour their commitments.

Next, it is vital that a regular assessment be carried out to ensure that every country benefiting from the GSP+ is honouring its commitments. The assessment must be particularly exhaustive with a view to the renewal of this instrument at the end of 2008. Our credibility and the effectiveness of this instrument depend on what legal experts call the principle of congruent forms. These preferences cannot continue being granted to countries that are politically incapable of fulfilling these commitments. The same goes for the future of this policy.

  Peter Mandelson, Member of the Commission. Mr President, I shall try to save you some money by making three points. First of all the Commissioner certainly agrees that we need to maintain high standards of surveillance and invigilation and we intend to do so. We have done so in the case of Belarus and have submitted proposals to the Council accordingly.

As regards Pakistan, granting privileges in trade requires us to keep within the rules that create those privileges and that is what we are doing and what we have done in respect of Pakistan, but I entirely accept the honourable Member’s view that we must do everything we can within those rules to give assistance to Pakistan.

As far as El Salvador is concerned, yes, I entirely accept that having granted GSP+ status, we must now monitor, on the basis of reports of international bodies, the effective implementation of the two ILO Conventions in El Salvador, and it is our clear intention to do so.

  President. – In accordance with Rule 103(2), I have received six motions for resolutions⁽¹⁾.

The debate is closed.

The vote will take place tomorrow, at 11.30 a.m.

(1) See Minutes