Is the GSP meant to profit the EU or create development successes?

Madi Sharma is a member of the European Economic and Social Committee and Founder of the Women’s Economic and Social Think Tank (WESTT)

On paper, Europe’s Generalised Scheme of Preferences (GSP) appears to be a great programme, if not an ideal one, for reaching global sustainable development goals. It seeks to encourage countries to recognise internationally accepted conventions on human rights obligations, good governance, labour rights and environmental standards by offering preferential access to the European market.
Unfortunately, the reality is that GSP has become a geopolitical tool, as the EU has failed to hold partners to equal standards and has erected weak monitoring and enforcement procedures. The EU is not only missing out on a valuable opportunity to create meaningful growth in underdeveloped countries but also failing to respect the European values that act as prerequisites for accession into the GSP.

At the core of the GSP, the EU created trade subsidy mechanisms which sought to inspire governmental reforms by promising economic opportunities to partner states on the condition they complied with European human, labour, gender and environmental standards. To accomplish this, the EU has developed three different schemes: the Standard Generalised Scheme of Preferences (GSP), the Generalised Scheme of Preferences Plus (GSP+) and Everything But Arms (EBA).

The GSP includes both coercive and seductive measures to elicit compliance. It provides the possibility to revoke benefits for ‘serious and systematic violations’ of both human and labour rights, as well as to grant further benefits for economic and governmental growth. Compliant states can graduate from the GSP and proceed through to the EBA and GSP+ for additional benefits and duty-free access to virtually all products, except for arms and armaments. These programs require even further acceptance of European standards, with GSP+ beneficiaries expected to ratify and implement the 27 international core conventions on human, labour, gender, and environmental protections.

In all cases, the European Commission (EC) is in charge of the monitoring the compliance of the countries. Every two years, the Commission publishes a public report on the GSP’s progress. However, the current process of data collection and consultations is neither transparent nor inclusive.

Unlike other Commission evaluations, civil society and the European Parliament (EP) are not included in this assessment. Although the EC does have a “scorecard” for each country outlining their ability to implement GSP objectives, the scorecards are kept confidential and made unavailable to these essential parties.

Additionally, GSP+ monitoring is conducted by external consultants, whose findings are shared only with government officials selected by the EU delegations. Critical stakeholders are not invited to contribute despite the fact that consultants and the EC regularly fail to even visit the factories or fields being assessed.

Furthermore, the EC relies on international organisations, such as the International Labour Organisation (ILO) and the UN, to monitor core conventions’ compliance on their behalf. Concerns raised by these bodies are utilised in EC reports while documents submitted by the countries concerned are omitted from the monitoring procedures. This forces the country in question to justify its progress to the EC after conclusions have been formed.

While nine countries are currently benefiting from GSP+, after ratifying some core instruments, this has not always translated into successful implementation. This is especially concerning as, in the words of one EU DG Trade official, “effective implementation cannot be defined” … and there starts the problem!

An illustrative example of this failure in implementation is Pakistan. Pakistan was ranked 147th out of 188 countries examined in the United Nations Development Programme’s Human Development Report 2016. The country has failed to ratify all of the 27 core conventions, a key requirement for participation in the scheme. Pakistan has expressed reservations regarding the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) and failed to enforce workplace safety standards and labour rights.

The GSP+ has a role to play in fostering the growth of strong economies, generating robust government institutions and implementing labour, gender and human rights protections. In a recent response to a question from the European Parliament, the European Commission justified the GSP as having created more jobs within the textile sector, equating to more jobs for women. However, testimonies of the Pakistani Workers Federation have highlighted the violations of the textile factories producing for Europe under GSP+ and the conditions of the workers.

To date, the EC, in charge of the monitoring and enforcement of the GSP’s conditionality, has only sanctioned countries on three occasions. Myanmar, Belarus, Sri Lanka and Cambodia have been, or are at risk of, removal from GSP programmes over the inability to live up to expectations proposed in these agreements.

This quite sporadic and rare enforcement of conditionality leads some to accuse the EU of using ‘double standards’ when enforcing the GSP. Namely, that for the same violations, some countries get sanctioned while other keep their benefits intact depending on their utility to the EU.

The GSP only adds value when the conventions are properly and effectively implemented with year-over-year improvements which are openly reported. The EU must therefore seriously reconsider and restructure the system.

It is hoped that the review of the GSP, the GSP+ and EBA currently underway will take into consideration the findings of civil society, business, trade unions and the EP to ensure these mechanisms are used for the purpose they were introduced – development.