MID-TERM EVALUATION OF THE EU S GSP: PRESENTATION OF THE MAIN FINDINGS
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1 MID-TERM EVALUATION OF THE EU S GSP: PRESENTATION OF THE MAIN FINDINGS Civil Society Dialogue Wednesday 7 November 2018 This project is financed by and executed by DEVELOPMENT Solutions. Any views expressed are those of the consultant and do not represent an official view of the European Union.
2 Content I. Introduction The EU s Generalised Scheme of Preferences Mid-Term Evaluation of the EU s GSP II. III. Main Findings Economic Impact Social and Human Rights Impact Environmental Impact Recommendations
3 I. INTRODUCTION
4 The EU s Generalised Scheme of Preferences 1 Contribute to poverty eradication by expanding exports from countries most in need 2 Promote sustainable development and good governance 3 Safeguard the EU s financial and economic interests
5 The EU s Generalised Scheme of Preferences Standard GSP A general arrangement for low or lower-middle income countries GSP+ A special incentive arrangement for sustainable development and good governance for vulnerable countries EBA Everything but Arms arrangement for Least Developed Countries
6 Mid-Term Evaluation of the EU s GSP Regulation (EU) No. 978/2012 introduced reforms to the scheme that entered into force on 1 January 2014: Revised list of beneficiary countries Expanded product coverage Improved mechanism for graduation Enhanced mechanism for temporary withdrawal Relaxed eligibility and increased monitoring under GSP+ Further discussed in Chapter 1.2 of the Mid-Term Evaluation
7 Mid-Term Evaluation of the EU s GSP Assess whether the objectives are on track to be achieved Assess the scheme s effectiveness, efficiency, coherence and relevance Formulate conclusions and recommendations
8 Economic analysis 1. Identification of policy changes Changes in beneficiary countries Country-sector combination of graduation or re-instatement of trade preferences Changes in GSP tariffs Changes in the Rules of Origin (RoO)
9 Economic analysis (II) 2. Descriptive and diagnostic analysis Analysis of the structure of the EU s tariff regime MFN, GSP and other PTAs Utilisation rate Preferential imports as a percentage of GSP eligible imports Preference margins Difference between GSP tariffs and MFN tariffs Analysis of export diversification by number of product lines traded and Herfindahl Index
10 Economic analysis (III) 3. Econometric modelling (Bilateral Gravity Model at Product Level) Assess impact of the GSP reform on exports from beneficiaries Assess impact on exports from countries that are no longer eligible under the scheme
11 Social, Human Rights & Environmental Analysis 1. General impact analysis Literature review Application of the GSP Regulation Ratification and implementation of UN and ILO conventions Stakeholder consultation
12 Social, Human Rights & Environmental Analysis (II) 2. Case studies on selected GSP+ and EBA beneficiaries In-depth analysis of social, human rights and environmental indicators Ratification and implementation of UN and ILO conventions by Bolivia and Pakistan Stakeholder consultation
13 Stakeholder Consultation 1. Stakeholder outreach activities 2. Interviews and meetings 3. Civil Society Dialogues
14 Stakeholder Consultation (II) 4. Local workshops in Bangladesh, Ethiopia, Bolivia and Pakistan
15 Stakeholder Consultation (III) 5. Online Public Consultation 961 responses High sectoral and geographical concentration ITALY BELGIUM SPAIN FRANCE GERMANY GREECE PORTUGAL ROMANIA CZECH REPUBLIC THE NETHERLANDS THE PHILIPPINES PAKISTAN BANGLADESH
16 II. MAIN FINDINGS
17 Share of EU imports by tariff regime Year Import value (EUR millions) MFN=0 MFN>0 GSP FTAs/PTAs Other ,578, % 21.5% 5.8% 9.5% 0.7% ,631, % 20.0% 5.8% 9.8% 0.9% ,530, % 20.2% 6.1% 10.7% 1.1% ,534, % 23.1% 3.9% 11.6% 1.1% ,557, % 26.1% 3.9% 12.4% 1.1% ,546, % 26.1% 4.1% 12.8% 0.9% Further discussed in Chapter of the Mid-Term Evaluation
18 IN MILLIONS OF EUROS Total value of EU imports under GSP GSP+ EBA Standard GSP Further discussed in Chapter of the Mid-Term Evaluation
19 IN MILLIONS OF EUROS Total value of EU imports by GSP beneficiaries GSP+_8 EBA_49 Standard GSP_23 Further discussed in Chapter of the Mid-Term Evaluation
20 Share of major EU imports under GSP Other Manufactured articles Vegetable products Prepared foodstuffs Raw hides and skins, etc. Live Animals Plastics Base metals Machinery Footwear, etc. Textiles 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% After Before Further discussed in Chapter of the Mid-Term Evaluation
21 HS Section Description the Change European Union EBA GSP+ GSP EBA GSP+ GSP EBA GSP+ GSP Section I Live Animals; animal products 5.9% 5.8% 3.0% 6.6% 5.6% 2.3% Section II Vegetable products 4.1% 4.1% 2.1% 4.2% 4.1% 1.6% Section III Animal or Vegetable fats and oils 5.6% 5.6% 2.9% 5.5% 5.5% 2.8% Section IV Prepared foodstuffs 10.1% 10.1% 3.6% 10.5% 10.4% 3.0% Section V Mineral products 0.7% 0.7% 0.7% 2.4% 2.4% 1.8% Section VI Products of the chem. & allied inds 4.3% 4.3% 3.8% 0.8% 0.8% 0.8% Section VII Plastics and Articles thereof 4.6% 4.6% 3.9% 4.3% 4.1% 3.6% Section VIII Raw hides and skins, leather, furskins 3.0% 3.0% 2.3% 4.6% 4.6% 3.9% Section IX Wood and articles of wood 2.4% 2.4% 1.8% 3.2% 3.0% 2.1% Section X Pulp of wood or other fibrous 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Section XI Textiles 8.0% 8.0% 1.6% 8.0% 8.0% 1.6% Section XII Footwear, headgear, umbrellas 8.0% 8.0% 3.7% 8.2% 8.2% 3.7% Section XIII Articles of stone, plaster, cement 4.0% 4.0% 2.6% 4.0% 4.0% 2.6% Section XIV Pearls, precious, semi-precious stones 0.6% 0.6% 0.6% 0.6% 0.6% 0.6% Section XV Base metals and articles of base metal 1.8% 1.8% 1.5% 0.0% 0.0% 0.0% Section XVI Machinery and mechanical appliances 2.4% 2.4% 2.1% 1.8% 1.7% 1.4% Section XVII Vehicles, aircraft, vessels, transport 4.9% 4.9% 3.1% 2.3% 2.3% 2.1% Section XVIII Optical, photographic... Instruments 2.5% 2.5% 2.3% 4.9% 4.9% 3.1% Section XIX Arms and ammunition 2.2% 2.2% 2.2% 2.4% 2.4% 2.3% Further discussed in Chapter of the Mid-Term Evaluation Section XX Miscellaneous manufactured articles 2.6% 2.6% 2.5% 2.6% 2.6% 2.5% Section XXI Works Of Art, collectors' Pieces % 0.0% 0.0% 0.0% 0.0% 0.0%
22 Utilisation rate GSP+ Countries Standard GSP Countries EBA Countries 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% After Before Further discussed in Chapter of the Mid-Term Evaluation
23 Export diversification Export diversification by number of non-zero tariff lines Standard GSP beneficiaries continued to diversify their exports Diversification increased for GSP+ and EBA beneficiaries Calculations of the Herfindahl Index confirm this Positive impact on diversification by Standard GSP and GSP+ countries EBA countries have the least diversified export portfolio Further discussed in Chapter of the Mid-Term Evaluation
24 Gravity modelling GSP beneficiaries increased trade with EU under GSP Tentative negative impact on countries that ceased to be eligible Countries with a trade agreement may have experienced a negative impact due to country-specific circumstances or as unintended effect of the GSP Further discussed in Chapter of the Mid-Term Evaluation
25 Social and Human Rights impact GSP as facilitator for social development and adherence to labour and human rights o Requires adequate domestic policies and measures Improvement on a variety of social indicators o Indirect effect Economic growth and export opportunities can also lead to worsened social and human rights situation o Land grabbing, e.g. Ethiopia and Cambodia o Violation of labour rights, e.g. Bangladesh
26 Social and Human Rights Impact (II) Conditionality to comply with fundamental human rights and labour standards. Conditionality of GSP+ incentivises beneficiares adhere to fundamental labour and human rights conventions, e.g. Sri Lanka GSP+ provides incentive for Standard GSP beneficiaries to ratify and implement UN and ILO conventions, e.g. Pakistan Further discussed in Chapter 3 of the Mid-Term Evaluation
27 Environmental impact No strong evidence that increased trade and economic growth contributed to environmental protection o LDCs and developing countries prioritise growth and poverty reduction Limited impact on sustainable development o Export expansion supports economic growth and production Negative impact of textile and clothing production, e.g. Pakistan, Bangladesh Some evidence that exporters improve environmental performance of their production processes o E.g. textile factories in Bangladesh
28 Environmental impact (II) Sustainable development increasingly important in policy dialogue in beneficiary countries Conditionality of GSP+ incentivises beneficiaries to implement UN conventions o Influenced by the beneficiary s reliance on EU market No legal conditionality for Standard GSP and EBA to adhere to environmental standards and comply with international conventions Further discussed in Chapter 4 of the Mid-Term Evaluation
29 Assessing Relevance, Effectiveness & Efficiency Relevance: Trade impact remains positive and vital for countries most in need Effectiveness: Focus on countries most in need; improved monitoring of UN and ILO conventions for GSP+ beneficiaries Efficiency: Utilisation rates and preference margins remained largely unchanged. Reliance and strategic partnership with monitoring bodies in the implementation of the Regulation Limited reduction of regulatory burden due extended and intensified EU monitoring Further discussed in Chapter 8.1 of the Mid-Term Evaluation
30 III. RECOMMENDATIONS
31 Recommendations on implementation Greater transparency on GSP+ monitoring and dialogues Promotion of information exchanges and stakeholder sensitization programmes More effective application of safeguard provisions More effective application of temporary withdrawal mechanism Further discussed in Chapter 8.3 of the Mid-Term Evaluation
32 Recommendations after expiry of scheme Update the list of conventions on core human and labour rights and environmental protection Harmonisation of Standard GSP and GSP+ arrangements Consider to include selected trade in services Ensure coherence between GSP and FTA/PTA regimes Further discussed in Chapter 8.3 of the Mid-Term Evaluation
33 GSP Evaluation
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