WTO Ruling On European Textile GSP By Tomorrow

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New Delhi, March 8: The World Trade Organisations’s (WTO) appellate body will come up with its findings on the European Union’s (EU) appeal against a panel ruling favouring New Delhi on the issue of tariff preferences to the developing countries under the generalised system of preferences (GSP) this week.

The EU’s special tariff preferences extended under the GSP to 12 developing countries, including Pakistan, for combating illicit drug production and trafficking, was declared as violative of trade rules by a WTO panel last October, following a complaint filed by New Delhi earlier that year.

The EU had challenged the panel ruling on January 8 this year by appealing to the appellate body against certain issues of law covered in the report of the panel.

New Delhi has been badly affected by the extension of concessions extended by Brussels to textile exports from Pakistan under the GSP scheme since the past two years. Domestic manufacturers claim that Pakistan’s exports have become more competitive because of the concessions.

Brussels contested the panel’s upholding of New Delhi’s claim that the special tariff preferences were inconsistent with the most-favoured nation obligation of article 1.1 of the Gatt which requires countries to accord equal treatment to products originating in the territories of all members.

Brussels challenged the panel’s agreement with New Delhi’s claim that the tariff preferences violated certain articles of the ‘enabling clause’ that calls for establishment of non-reciprocal and non-discriminatory preferences under the GSP scheme, designing of preferences to facilitate and promote trade of the developing countries and responding positively to the development and financial and trade needs of the developing countries.