Speaking of the EC GSP program, as I was in the last post, the Economist has an article this week in which they discuss Sri Lanka's access to the GSP Plus program. The GSP Plus program requires compliance with various international labor, environmental and human rights standards, and grants additional preferences beyond those in the ordinary GSP program. Having met these standards initially and, as a result, having been offered the Plus preferences, apparently Sri Lanka is now at risk of failing to comply with them, due in large part to the government's fight against a domestic rebel group. An EC official suggested that in order for Sri Lanka to continue to meet the standards, and thus for its GSP Plus access to be renewed, it will have to take some action to resolve a couple specific complaints of government repression. The article then states:
If the EU renewed the agreement without such progress, it might be challenged at the World Trade Organisation—as happened to an EU trade sop to Pakistan in 2004.
So, I guess the legal argument would be the following. Having set out some objective criteria for access to GSP Plus, the EC must then apply these criteria when deciding who can participate in the program. If the EC provides GSP Plus access to countries that do not satisfy the established criteria, they are not applying the criteria. Here, this would mean that if Sri Lanka is not in compliance with the GSP Plus rules, it should not be in the program. Countries who do not have access to GSP Plus and whose exports compete with Sri Lanka's would have an incentive to challenge Sri Lanka's inclusion.
