12 Colum. J. Eur. L. 827 (2006)

Dionysia-Theodora Avgerinopoulou, J.S.D. candidate in International Law, Columbia Law School.

The European Community (EC) adopted a Regulation on June 27, 2005 regarding its Generalized System of Preferences (GSP) scheme, which aims to give to developing countries preferential access to the European Union (EU) market through lower tariffs. GSP schemes favor trade with less developed and least developed countries (LDCs) and function as a legal exception to the most-favored-nation (MFN) principle embodied in the first article of the General Agreement on Tariffs and Trade (GATT) by application of the GATT Enabling Clause of 1979. Replacing the previous GSP scheme in force from January 1, 2002 to December 31, 2004, the new GSP scheme came into effect on July 1, 2005 and will remain in force until December 31, 2008.

The design of the new GSP scheme reflects the current efforts by the European Community to simplify EC legislation. In comparison with the previous GSP scheme, which was comprised of five arrangements, the drafters of the new scheme cut it back from five to three separate arrangements. Furthermore, the new scheme is deemed to be in accordance with international developmental policy objectives, such as the eradication of poverty and sustainable development as expressed in various international law and policy instruments, such as the Millennium Development Goals (MDGs) adopted by the United Nations (UN), and declarations adopted during international summits for the environment.

The setting up of an additional GSP arrangement, namely a GSP promoting environmental and good governance goals (the GSP+ or GSP Plus) is the new, distinctive element of the current GSP scheme. The GSP+ introduces innovative provisions allocating tariff benefits to countries upon ratification and effective implementation within their territories of, inter alia, multilateral environmental agreements (MEAs) (positive environmental conditionality). On the one hand, conditionality seems to be an answer to the everlasting issue of enforcement and implementation of MEAs. On the other hand, previous case law by the World Trade Organization (WTO) contesting the legality of the conditionality provisions of the previous EC GSP scheme indicates that future litigation with regard to the positive environmental conditionality provisions may arise. In addition, the effort of the drafters of the current GSP scheme to promote good governance and environmental sustainability could be undermined by the fragmented, non-holistic approach to environmental protection that has been followed. The following Parts provide a short history of the institution of the GSP schemes, presentation of the current EC GSP scheme, and some proposals for improvements based on the large-systems methodology.