May 14, 1991

UNCTAD HOPES GSP SCHEMES WILL BE EXTENDED AND IMPROVED.

GENEVA, MAY 13 (BY CHAKRAVARTHI RAGHAVAN) A senior UNCTAD official has expressed the hope that the Industrials Countries providing preferences to imports from the Third World under their schemes for Generalised System of Preferences (GSP) would extend and improve them.

Carlos Fortin, Deputy to the Secretary-General of UNCTAD was speaking at the UNCTAD Special Committee on Preferences.

The Committee, which runs till 17 May, elected on 10 May Carlos Humberto Matute Irias of Honduras as its Chairman and Yong Siew Min of Singapore as Rapporteur.

Speaking after election, Humberto Matute underlined the importance of the meeting in the light of the continued general economic slowdown and its repercussions on industrial production.

While no spectacular results, he said, could be expected from the committee before the final results of the Uruguay Round are known, it should nevertheless be possible to make progress towards maintenance and improvement of the GSP schemes. Non-tariff measures, in particular restrictive quantitative measures, he added, were limiting the effectiveness of those schemes.

Fortin said that though it would be difficult to adopt concrete measures at the meeting (before the conclusion of the Uruguay Round), it provided an opportunity for a good exchange of views on the direction the GSP may take in the future.

He hoped that the Committee deliberations would be pursued in the same positive atmosphere as at its second comprehensive 10-year review carried out in May 1990 which had led to a consensus resolution on the need to maintain and improve the schemes.

The large number of informal bilateral and plurilateral consultations that would be undertaken during the meeting, he added, would also provide inputs for appropriate improvements in various GSP schemes.

Fortin also paid a tribute to Japan, which he noted, was the first to extend its scheme for another 10 years as well as to introduce significant improvements. He hoped that other countries would also extend their schemes and improve them to take account of the erosion of preferential margins resulting from the tariff reductions in the Uruguay Round.

The Director of UNCTAD's International Trade Programme, Vijay Kelkar who addressed the Committee on Monday, while introducing the documents, said that while the tariff reductions in the Uruguay Round would undoubtedly lead to an erosion of preferential margins, it could be offset by increasing the product coverage of the schemes.

Kelkar underscored the importance of the GSP for an increasing number of Third World countries as they developed their export supply capabilities in non-traditional product areas. The positive achievements of the GSP in the export sector also underscored the importance of GSP as an international trade policy instrument until the end of the century.

Kelkar hoped that the deliberations of the Committee would strengthen the impetus for the continuance of the system for a third decade and that measures would be taken to liberalise the schemes so that they could, better assist Third World countries to achieve the objectives of the GSP, namely, to increase their export earnings, promote their industrialisation and to accelerate their rates of economic growth.