Lukasz Adam Gruszczynski, of the European University Institute, has posted a paper titled "The EC General System of Preferences and International Obligations in the Area of Trade - The Never-Ending Story" on SSRN. From the conclusion:
This article argues that a part of the new EC GSP scheme (i.e. GSP Plus) contains elements which appear to be inconsistent with the obligations of the EC under WTO law. In particular the article questions whether different countries may be considered as similarly suited on the basis of their adherence to international treaties. In this context, it proposes to apply other criteria such as HDI. The article also submits that development needs as provided in the Enabling Clause should be understood in an economic sense. At the same time, the article recognizes that the EC as a party bearing the burden of proof in potential WTO proceedings, may have difficulties in providing evidence on the existence of a relationship between development and adherence to labour or environmental standards. Another feature of GSP Plus, which seems to be disputable from the perspective of WTO law, is the objectivity of the criteria used by the EC. The short application period and the selection of the conventions cast serious doubts as to the good faith of EC actions. Finally, the article also criticizes the inflexibilities which are built into the GSP Plus system (i.e. lack of procedure to allow for the immediate inclusion of new beneficiaries).
On the other hand, one also needs to realize that despite the above legal deficiencies of the GSP Plus scheme, it may be politically impossible for developing countries to bring a case to the WTO. As noted in the literature, such an action could endanger the existence of a different general system of preferences, since nothing in WTO law requires donor countries to maintain schemes that are no longer politically acceptable. Moreover, it also seems that the current EC proposal addresses some flaws of the system in a manner which is compatible with the obligations of the Enabling Clause. This can also reduce a tension between the EC and potential beneficiaries.
The second sentence of the last paragraph has me wondering: How big of a risk is it for developing countries to bring a claim against GSP-based discrimination? Would developed countries ever withdraw their programs entirely in response?
