Select Committee on European Communities Report



7.  PROPOSAL FOR A COUNCIL REGULATION (EC) EXTENDING THE COVERAGE OF REGULATIONS (EC) NOS 3281/94 AND 1256/96 CONCERNING THE EUROPEAN UNION'S SCHEMES FOR GENERALISED SYSTEM OF PREFERENCES FOR THE BENEFIT OF THE LEAST DEVELOPED COUNTRIES (LDCS) (13638/97)

Letter from Lord Tordoff, Chairman of the Committee, to Lord Clinton Davis, Minister for Trade, Department of Trade and Industry

  On 17 February Sub-Committee A scrutinised this document and your Explanatory Memorandum dated 28 January.

  There was one point in your Explanatory Memorandum which puzzled us. This was your assertion, in paragraph 16, that "there were no financial implications for the United Kingdom". We found this difficult to understand if extending the level of preferences to some of the Least Developed Countries was to have any impact.

  Although we should be grateful to receive your comments on this point, this letter raises the scrutiny reserve.

24 February 1998

Letter from Lord Clinton-Davis, Minister for Trade, Department of Trade and Industry, to Lord Tordoff, Chairman of the Committee

  Thank you for your letter of 24 February regarding my Explanatory Memorandum on a proposal to extend the levels of preference under the Generalised System of Preferences for Least Developed Countries.

  As you rightly say there will be some financial implications from this Regulation for the UK in the form of lost customs revenue. However, given the current levels of trade with the LDCs it will not be significant. The financial statement prepared with the proposal indicated a total loss of customs revenue to the EU as a whole as 77918 ECU.

  The economic impact of the Regulation is not significant because the EC already offers the duty free access to the majority of LDCs on a very wide range of products under the Lome convention. This Regulation extends this access to nine LDCs who are not signatories of the Lome convention. The objective of the Regulation is not purely economic and is intended to encourage other developed and more advanced developing countries to offer similar market terms and to work towards the elimination of tariffs on LDC products. A multilateral agreement in these terms would offer real benefits for all LDCs.

16 March 1998




 
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