The European Union's executive on Tuesday unveiled plans to exclude middle-income countries such as Russia and Brazil from a preferential trade regime, saying it wants to concentrate concessions on poorer countries. The EU's current General System of Preferences (GSP) reduces tariffs or quotas for 176 countries, covering most of the world. The European Commission, meeting in Strasbourg, France, said it wants it to be reduced to "approximately 80 countries."
In a statement, EU Trade Commissioner Karel De Gucht said only "those countries most in need must reap the most benefits" from trade concessions. The commission mentioned Kuwait, Russia, Saudi Arabia and Qatar among the high- to middle-income countries that are set to be excluded from the GSP system. The Financial Times, which reported on the proposal on Monday, also listed Brazil and Argentina.
The final list of countries to be included in the new GSP regime would only be worked out just before the enforcement of the new rules, based on World Bank and other relevant data from the previous three years, the EU executive said. Countries excluded would have an opportunity to secure alternative concessions by signing free-trade deals with the EU. De Gucht also presented plans to widen criteria allowing countries to qualify for GSP+, an even more advanced trade regime that the EU grants to poorer countries in return for commitments on democracy and human rights.
Revising the GSP+ criteria was one of the measures that was discussed by the EU late last year to help the post-flood recovery of Pakistan, which currently not a GSP+ member. Tuesday's proposals would have to be approved by EU governments and the European Parliament, in a process that could see them substantially changed. The commission said it would like the new rules to be in place by January 1, 2014 "at the latest."