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Despite
graduation to developing country status Maldives clinches
EU trade preferences till 2014
In what could be described as the biggest economic boost,
the European Union has decided to extend preferential treatment
for exports from the Maldives until 2014 despite the country
graduating from Least Developed Status (LDC) in three years.
Trade Minister Mohamed Jaleel told journalists that the assurance
of extension came from the European Commission Director General
for Trade David O’Sullivan during his recent meeting
in Brussels.
“The Maldives got an extension for trade preferences
until 2014 under the “Everything But Arms” initiative
that it enjoys at present,” Jaleel said.
The extension of trade preferences were based on the vulnerability
of the environmental issues the country is faced with, he
said.
Nearly 30% of the Maldives’ exports are to Europe and
enjoys zero tariff.
“But we will not be complacent despite the extension,”
he assured telling reporters that moves are underway to further
strengthen Maldives’ prospects to boost trade.
Negotiations are already underway with the US and Japan on
working out trade preferences.
Usually when a country graduates from the LDC status, it loses
trade preferences enjoyed under the “Everything But Arms”
initiative of the European Commission. The initiative offers
duty-free access to imports of all products from least developed
countries without any quantitative restrictions.
The EU Generalised System of Preferences (GSP) is the system
of preferential trading arrangements through which the European
Union extends preferential access to its markets to developing
countries.
Countries outside the LDC status have have to become part
of GSP + if they were to benefit further via trade preferences.
Yet GSP + imposes preconditions like becoming signatory to
ILO and to Convention on International Trade in Endangered
Species of Wild Fauna and Flora, to which the Maldives has
not acceded yet.
But the Minister said more work need to be done before becoming
part of GSP+ for which the Maldives has to sign 11 conventions
including passing new legislation in Parliament.
The country has already become signatory to 16 out of 27 Conventions
with only 11 left.
While graduation to Developing Country status represents a
positive recognition of the huge socio-economic strides taken
by the Maldives over recent decades, it also brings with it
important challenges such as the loss of trade preferences
and the reduction in the receipt of development aid.
Trade Minister Jaleel also spoke of his meeting with the Director-General
of the World Trade Organisation (WTO), Pascal Lamy, in order
to discuss the Maldives’ economic transition from LDC
to Developing Country status.
He said Mr. Lamy expressed the WTO’s commitment to ensuring
that the Maldives’ graduation should proceed as smoothly
as possible and not result in negative effects on the country’s
trade flows.
Mr. Lamy expressed the WTO’s strong support for ensuring
that graduation will be a “painless process.” He
also noted that, while differentiation within the international
trade regime is still a “taboo subject” for many.
During the meeting, the two also discussed the ongoing Doha
Development Agenda round of world trade talks, with Mr. Lamy
noting that the world’s trade negotiators now face “crunch
time” for agreement.
(Source: www.hamaroalhi.com)
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