Brussels, 22 September 2021
The Federation of the European Sporting Goods Industry (FESI) welcomes the European Commission’s proposal to renew the Generalised Scheme of Preferences Regulation (GSP). FESI firmly believes that the new GSP, including the GSP+ and EBA regimes, will further contribute to the sustainable development of the GSP beneficiary countries. So far, it has proven to help the latter becoming more competitive, reduce poverty, build their domestic industries, increase employment, and improve good governance.
“FESI has followed with great interest the recent debate on the GSP Regulation, and we can only applaud the decision taken today by the Commission to renew the scheme for the next 10-year cycle”, commented Jérôme Pero, FESI Secretary-General. “The GSP is the crown jewel of the EU Trade Policy. GSP, GSP+ and EBA programmes are all still relevant and offer the right degrees of incentives towards sustainable development. It is now crucial to make sure that the proposed schemes are simple and predictable enough for companies”, he added.
Indeed, predictability is a key feature of the GSP regulation. Over the years, the GSP programmes have proven to be highly effective in encouraging European companies to invest in partner countries while bringing their social and environmental standards with them. The GSP programmes did not only drive economic growth, but also helped bringing sustainable business practices to developing countries. But to continue driving change, sporting goods companies need the GSP Regulation to be sufficiently predictable to let them plan their local leadership programmes and investments many years in advance.
The inclusion of the Paris Agreement on Climate change is also a positive move. The sporting goods industry is deeply engaged in addressing its carbon footprint and has the ambition to become an industry leader in this field. For instance, many FESI members are among the signatories of the UN Fashion Industry Charter for Climate Action[1] and are committed to achieve net-zero emissions by 2050.
Moreover, it is important that the advantages granted under the GSP are not removed by a Free Trade Agreement (FTA). The latter should provide for either the equivalent or enhanced preferences for the countries concerned. If we take the example of Vietnam and the recent FTA with the EU that came into force last summer, companies are now in a least favourable situation as they must comply with the double transformation rule with very limited possibility of regional cumulation. Although to avoid this and uphold the initial purpose of the GSP we suggested foreseeing a cumulation among all GSP beneficiaries’ and FTA countries, we welcome the additional flexibility to the Rules of Origin for GSP beneficiaries’ countries that the Commission put forward in the new proposal.
While FESI welcomes the new adjustments made today to the GSP, we believe that further improvements could be made to ensure a more fair, transparent, and manageable framework. In particular, we regret the that the classification of products deemed “sensitive” has not been clarified in the new proposal. In fact, the new Regulation continues to qualify footwear and apparel as sensitive, thus putting a discriminatory cap on the duty reduction of these products. The absence of a clear definition and criteria of what is considered “sensitive” and “not-sensitive” creates a lack of transparency. FESI now calls on the co-legislators for further clarification and recommends classifying footwear and apparel as “not-sensitive”. As an alternative, FESI would support the “Sunset clause” proposed in the external study supporting the impact assessment on the GSP Review[2]. A sunset clause for all excluded and sensitive products could be considered, together with an industry-driven mechanism to establish (or continue) a country product exclusion/sensitivity. This would also contribute to diversification in the beneficiary countries and systematically re-tailor the scheme to meet the needs of a rapidly evolving EU industrial structure.
The EU’s Generalised Scheme of Preferences (GSP) grants unilateral tariff preferences to developing countries as a means of supporting their economic and social development, as well as promoting human rights, employment standards, sustainable development, and good governance practices. Today’s proposal to renew the preferential tariff scheme between the EU and developing countries was very timely as the Regulation governing the scheme expires on 31 December 2023. The new proposal therefore allows for a renewal of the scheme for the period 2024 – 2033.
***
[1] https://prod5.assets-cdn.io/event/7184/assets/8367839725-65da307731.pdf
[2] https://trade.ec.europa.eu/doclib/docs/2021/june/tradoc_159598.pdf
Contact: Ariane Gatti, FESI Communication Officer / [email protected] / +32 274 08 94
