The WTO Legality of the EU's GSP+ Arrangement
14 Pages Posted: 15 May 2007
Date Written: August 10, 2007
In response to the WTO Appellate Body's ruling in EC-Tariff Preferences, when the EU renewed its GSP program in 2005, it replaced its drugs arrangement, as well as two labour and environment arrangements, with a new arrangement popularly known as the 'GSP+ arrangement'. Under this arrangement, additional tariff preferences (normally duty free treatment), were made available to developing countries committing to ratify and implement a list of human rights and good governance conventions, so long as these countries applied by 31 October 2005. All but one of the countries benefiting from the former drugs arrangement are on the new list, now joined by Georgia, Sri Lanka, Moldova and Mongolia. This arrangement will apply until 31 December 2008.
According to the EU, the GSP+ arrangement complies with the Appellate Body's interpretation of the Enabling Clause. This article argues that it does not. This is, on the one hand, because of the substantive criteria chosen by the EU to select GSP+ beneficiaries, which do not meet the Appellate Body's criteria for differential tariff treatment of developing countries; and, on the other, because of the EU's requirement that would-be beneficiaries must have applied by a certain date. This, somewhat oddly, replicates the problem of the 'closed list' of beneficiaries that was fatal to the earlier incarnation of the EU's GSP program.
Keywords: WTO, international law, generalized system of preferences, gsp, european union, european community, trade policy, trade law, development law
JEL Classification: K33
Suggested Citation: Suggested Citation