Traders slam EU social incentives

Date: 30/10/1997

THE EU could become the world's first trading club explicitly to link commercial benefits to social and environmental standards if governments accept proposals unveiled by External Relations Commissioner Manuel Marín this week.

But traders are already dubbing the move as overly bureaucratic and unworkable.

The Commission says developing countries which adopt three key International Labour Organisation (ILO) conventions should have their EU tariff reductions doubled for industrial products, and increased by two-thirds for agriculture.

At present, countries such as China, India and Brazil get tariff-free access for 'non-sensitive' products, 65&percent; tariff reductions for 'semi-sensitive' ones (such as leather), 30&percent; off 'sensitive' items (such as shoes), and 15&percent; off 'very sensitive' products (many textiles).

Under the deal, industrialists deemed by their governments to have fair working conditions, in a country that the Commission feels is committed to labour standards could, for example, get 30&percent; off very sensitive products.

In certain sectors, the same advantages would also apply to countries which apply international rain forest protection rules, while nations which have 'graduated' from the Generalised System of Preferences (GSP) system could be brought back in with 25&percent; reductions.

EU trade lobby EuroCommerce's initial reaction to the move was hostile. “I think the system the Commission has proposed is likely to lead to an administrative nightmare,” said spokesman Philip von Schöppenthau.

“The preference margins are not high enough. This will not change things on the ground. The scheme appears to be more closely tailored to protecting certain EU sectors than to improving conditions in developing countries.”

Asian countries are also unlikely to accept the rules, preferring direct development aid instead.