EUROPEAN GENERALIZED SYSTEM OF PREFERENCES

Since 1971, the EU opened the generalized tariff preferences for some agricultural commodities (chapters 1 to 24) of the Common Customs Tariff (CCT), originating in developing countries (Ecuador, Bolivia, Colombia, Peru, and Venezuela).

The ten-years initial period for the preferences system application ended in December, 31^st, 1980, the second period deadline was December 31^st, 1990, establishing an extension period up to June 30, 1999 (Regulation EC No. 1256/96, dated June 20, 1996).  During September, 1998, however, the generalized tariff preferences community plan was renewed.  Such a plan involves a general regime and encourage special regimes for the January 1^st, 1999-December 31^st, 2001 period.

OBJECTIVES

Provide new impulse to the community development policy within the Union's external policy frame in order to reach a strong and long lasting economic development of developing countries, and its harmonious and progressive access to the world economy.  Moreover, such a plan seeks the WTO tools' accomplishment, thus, preferences are transitory and should be granted according to necessities and gradually be revoked when not necessary.

Countries engaged in effective anti-drug production/traffic programs are benefited from a duty exemption if they keep on with their drug control efforts.

Actually, it is intended to subordinate the preferential regime to the labor and environmental standard accomplishment.

THE SYSTEM'S FUNCTIONING SYSTEM

The Preferences System is intended to reduce tariff duties which involves certain commodities whose trade increment is foreseen.

Exclusions are for those commodities subject to fiscal duties and commodities whose developing countries imports with a preferential tariff regime could jeopardize domestic industry.

GENERAL REGIME

Preferences granted by the EU are from 0% to 100%.  The Andean Community and the Central America Common Market countries have an extra preference for certain commodities.

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