Conclusions and Recommendations

• Author: Development Solutions Europe Limited, Directorate-General for Trade (European Commission)
• Pages: 243-266

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8 Conclusions and Recommendations

8.1 Review of Evaluation Questions

In order to guide the analysis of the performance of the GSP, the MTE has sought to

provide answers to the six specific questions, which are listed as foll ows:

1. To what extent are the objectives of the curren t GSP on track to be achi eved? What

has been the impact of the present scheme on developing countries and LDCs?

2. What are the factors (positive and negative) influencing the achievements observed ?

3. What unintended consequences, i f any, can be linked to the design, implementation,

or use of the current GSP?

4. To what extent is the current GSP efficient?

5. To what extent is the current GSP coherent with the EU’s relevant policies?

6. To what extent is the current GSP relevant to the development needs which it

intended to address?

8.1.1 Are the objectives of the current GSP on track to be achieved?

The Analytical Framework of t he MTE, presented in Annex IV, highlights the required

evidence and analysis that the Project Team proposed to utili se in assessing whether the

objectives of the GSP are on track to be achieved. To thi s effect, the Project T eam

carried out extensive analysis on the following: (i) revised eligibility criteria; (ii) the

reduced number of b eneficiaries; (iii) the reformed graduation and increased thresholds;

(iv) the simplified GSP+ entry mechanism; (v) the GSP+ moni toring mechanism and

progress in the implementation of GSP+ conventions; (vi) simplified and clarified

safeguard mechanisms; and ( v) redefined product sections and increased product

coverage.

With regard to the revision of the el igibility criteria, The MTE has found t hat there has

been a much improved focus on countries most in need. The graduation of countries and

sectors which were p rime ben eficiaries under the previous regulations has been

conducive to achieve this impact. For example, it was evident from the e conomic impact

analysis conducted that the graduation of Chi na and Thailand from the scheme, as well

as India from specific preferences in the textiles sector, have resulted in an expansion of

exports from the GSP beneficiary countries which were retained. The remaining GSP

beneficiary countries have become more able to take advantage of preferential market

access opportun ities under the scheme as evidenced by the growth of their EU imports

under the GSP (See Chapter 2.1 and 2.2 of the Final Report for further detail). The

bilateral gravity model estimates further confirm that countries which have been el igible

for any of the GSP arrangements throughout th e period 2011-2016 tended to trade more

intensively with the EU.

Some stakeholders who participated i n the interview process have cautioned that

although there has been a reduction in the number of benefi ciaries in the GSP, the EU

has negotiated or is in the process of negotiating trade agreements with some of the

graduated countri es. As the EU engages in continued preferential trading arrangements

with former GSP beneficiaries, this may reduce the value of GSP preferences for the

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countries most in need. Nevertheless, the MTE has found that the extent of preference

erosion following t he introduction of the GSP Regulation (2014 -2016) is very small. As a

result, there are significant preferential market access benefits to be derived for

countries most in need, particularly LDCs (See Chapter 2.2 of the Fi nal Report).

As a cons equence of the simplification of the GSP+ entry mechanism, i t has been found

that beneficiary countries are now more inclined to participate in this arrangement,

notwithstanding the conditionalities attached. Countries like Bangl adesh that are seeking

to graduate from l east developed country (LDC) status to regular developi ng country

status, initially at the lower-middle-income bracket, have expressed their interest to

seek GSP+ status at the earliest opportunity. This was highlighted by the high-level

officials that participated in the stakeholder outreach workshop that was held in

Bangladesh. The underlying reason is greater market access opportunities under the

GSP+ arrangement, as compared to the Standard GSP arrangement, on par with EBA

preferences across most sectors i n which the c ountry is currently tradi ng. However, in

order to qualify for the GSP+ arrangement, all beneficiary coun tries must satisfy th e

‘vulnerability criteria’, ratify and implement 27 international conventions, as well as

abide by an undertaking to, inter ali a, cooperate with the Commission in GSP+

monitoring. 718

With regard to the GSP+ monitoring mechanism and the progress on the implementati on

of the GSP+ conventions, the MTE has found that there had been a resultant positive

impact on social and environmental development, particularly in Pakistan. Pakistani

stakeholders who participated in both the local stakeholder workshop and in interviews

with the Project Team reaffi rmed the unique nature of the GSP+, and positively

appreciated the partnership that has been engendered between the EU and the

Government of Pakistan towards sustainable development (see Case Studies on GSP+ in

Chapter 7 of the Final Report). The ratification and implementati on of the 27

international conventions wa s not considered as onerous or intrusive, but rather seen as

a driver of the country’s development processes.

The improved frequency and enhanced scope of t he GSP+ monitoring have increased the

EU’s leverage in the beneficia ry countries. It has allowed for constructi ve dialogue, and

has been found to contribute to sustainable development and good governance.

Notwithstanding, civil society stakeholders across beneficiary coun tries have observed

that the monitoring system employed by the EC could be imp roved. Information about

the scorecard mechanism is not publicly available. It is understood that this is intended

to preserve confidentiality as well as to build confidence between the EU and national

governments in the process. However, throughout the course of stakeholder

consultations, it was consistently raised that greater transparency, accountability and

standardization of the scorecard mechanism co uld lead to improved ef fectiveness of the

monitoring process.

718 A beneficiary is considered to be vulnerable due to a lack of export diversification and insufficient integration

within the international trading system. In this regard, Annex VII of the GSP Regulation stipulates that the

following thresholds must be met: (i) the seven largest sections of GSP covered exports represent more than

75 per cent of its total GSP covered exports to the EU as an average during the last three consecutive years;

and (ii)The beneficiary’s GSP covered imports represent less than 6.5 per cent of the total GSP covered imports

to the EU as an average during the last three consecutive years.