Developing countries benefit most from EU trade scheme

Cecilia Malmström © Dutch Government/Valerie Kuypers
Cecilia Malmström © Dutch Government/Valerie Kuypers

A report by the European Commission and the European External Action Service shows how developing economies benefit from the EU’s duty-rebate schemes.

The EU introduced a reformed external aid initiative, known as the generalised scheme of preferences (GSP) in 2014. Since then, the report shows that imports to the EU from countries which benefit from the scheme’s tariff cuts have risen by nearly 25%, which represents a financial increase of some €63 billion. The least developed countries benefitted the most from the scheme, and saw their exports to the EU increase by nearly 40%, with an economic value of €23.5 billion.

European Commissioner for Trade Cecilia Malmström explained the role that European trade can play in not only encouraging economic growth in developing countries, but in contributing to the improvement of quality of life and human rights. She said: “We’re now seeing positive changes in many places around the world – strengthening core values of EU trade policy such as human rights and sustainable development. Stronger domestic institutions and laws are helping to put crucial international conventions into place.”

How has the scheme impacted international development?

Alongside the economic impact, the report indicates that the scheme has also encouraged progress in a number of areas:

  • Women’s empowerment;
  • Child and forced labour;
  • Illegal drugs trafficking; and
  • Climate change.

For example, the report cites the EU’s role in helping Pakistan to pass new legislation to combat honour killing and rape. However, it also argues that in some beneficiary countries, more efforts should be made to implement and enforce the relevant legislation.

Malmström added: “In some countries, there are still areas of serious concern as regards human rights and sustainability. Here, our trade schemes provide leverage for us to apply pressure and effect change, and we need to strengthen our joint efforts.”

In support of this, the EU will continue to engage with beneficiary countries to carry out priority actions, and send targeted monitoring missions to countries which have demonstrated greater shortcomings in these areas.

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