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Two years ago, EU Ministers agreed a strategy to grant trade preferences to the least developed countries (LDCs) to match the best deals available under the EU/ACP Lome Convention or the Generalised System of Preferences (GSP). The world's poorest countries - which account for just 0.4% of world trade - are particularly suspicious of the WTO and richer regions like the EU, and claim successive moves to liberalise trade have failed to improve their economic circumstances.The proposal - drafted by the services of Trade Commissioner Pascal Lamy, Agriculture Commissioner Franz Fischler and Development Commissioner Poul Nielson - follows on from an attempt by the EU at the WTO's disastrous Seattle meeting last December to forge a consensus among richer nations offering wide duty-free access to poorer nations. The EU is already the first market for most products from least-developed countries. The Commission says in its draft proposal that it wanted to improve on this record, irrespective of what the EU's other partners do. The proposal extends to all products from the poorest nations, except arms and munitions, and lifts any quantitative restrictions. "Such an initiative will send a strong and credible political signal to all our partners", the draft proposal says. "This proposal will also set an example for other WTO members." It will also show that after Seattle the EU is "taking the initiative on trade liberalisation, and will testify to its genuine efforts to take on board the needs and concern is expressed by these countries regarding a new round of multilateral trade negotiations."--The least-developed countries (LDCs or LLDCs) account for a tiny poportion of world trade yet trade can account for a sizeable share of their foreign exchange needs and is therefore crucial to economic development. Their exports represent 9% of gross domestic product, whereas imports represent 16%. In 1999, the EU imported Euro 8.7 billion of manufactured goods from LDCs (1.3% of total EU imports), up from Euro 5.7 billion in 1993. Of these imports, Euro 3.4 billion was in manufactured goods (0.9% of total EU imports of manufactured goods), Euro 1.5 billion (3.4%) in textile and clothing imports, and Euro 2.8 billion (4.3%) in agricultural imports.--The proposal involves taking action on an autonomous basis tariff preferences at multilateral level and amending the December 1998 Regulation on a multi-annual scheme of generalised tariff preferences. The alternative would have been to propose a tariff scheme for the poorest nations separate from the EU's Generalised System of Preferences (GSP) and to extend its application beyond 31 December 2001. However, this would have been a departure from the concept of a single EU generalised system of preferences which, in any case, has to be reviewed before the end of 2001 in order to decide what amendments are required for the last phase of the ten-year scheme up to 2004. The proposal includes technical amendments to define more precisely the scope of the special support arrangements for the fight against drugs.The 1998 Regulation left 944 of the 10,500 positions in the Common Customs Tariff uncovered by the system and the new proposal will extend free access to 919 of these. Only 25 tariff positions relate to arms, which will remain excluded. In terms of trade value, the proposal affects imports worth some Euro 78 million, including imports which already benefit from partial liberalisation or even total liberalisation within existing tariff quotas. "This figure may appear quite modest alongside that of Euro 8.7 billion for total imports of LDC products", the proposal admits. "This is due to the very high proportion of imports which already enjoy free access. Nevertheless, the proposal covers many products which are not imported at all because of the high levels of protection. The aim of eliminating this protection is to stimulate future flows of imports from these countries."Granting free access to their products is not the only important measure to be taken to help these countries, the proposal says: another important objective is to bolster production capacity so as to enable them to produce and process a greater number of quality goods for export.--Among the global inequality statistics are that:* * The world's richest 225 individuals have a combined wealth equal to the annual income of the poorest 47% of the world's population.* The 48 LDCs account for just 0.4% of world trade.* 1.3 billion people world-wide live on just one Euro a day.* According to the United Nations, if the world's richest 200 people were to give up 1% of their wealth each year, they could pay for every child on Earth to have free access to primary education.* The cost of a computer in the US works out at an average one month's pay. In Bangladesh it is the equivalent of eight years' salary.--
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Article Type:Brief Article
Geographic Code:4EU
Date:Sep 20, 2000

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