At the interregional level, the GSTP provides for preferential market access among developing countries.

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One way preferences

He called for improvements in the Generalized System of Preferences to facilitate market access through remaining preferences.

The representative of Japan acknowledged the problem of preference erosion as one of the greatest concerns of some LDCs, although he did not think that the losses resulting from preference erosion exceeded the gains from trade liberalization.

In outlining the negative effects of tariff escalation in section I.A of the report, more attention might have been given to the consideration of the links between MFN and preferential regimes, since the existence of preferential margins in relation to tariff levels mitigated the effects of tariff escalation.

Erosion of preferences

One way preferences include General System of Preferences (GSP) schemes, the Everything but arms (EBA) initiative of EU and those agreed to under successive Lomé accords and Cotonou agreements.

Developing countries that have been enjoying non reciprocal preferential market access have called for adequately addressing the erosion of preferences arising from the most favoured nation tariff reduction.

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The preferential measures among developing countries would complement preferential schemes offered by developed countries.

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Shanghai introduced preferential policies

Ceilings are also applied on GSP benefits.

33. It was stressed that trade preferences such as the GSP are mutually beneficial to preference giving and preference receiving countries.

Under the GSP scheme of Japan, GSP rates on various agricultural and fishery products have been reduced to maintain the preferential margin following the MFN tariff cuts of the Uruguay Round MFN tariff reductions.

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In this connection, it was also necessary to further analyse and study ways and means to enhance the utilization of existing trade preferences such as the Generalized System of Preferences, and ways of improving trade preferences and rules of origin, not least because of the trend towards greater reciprocity and graduation of countries receiving trade preferences and because of the proliferation of regional trading arrangements.

Nevertheless, the claims of foreign creditors other than those concerning tax and social security obligations shall not be ranked lower than identify the class of unsecured non preference claims, while providing that a foreign claim is to be ranked lower than the unsecured non preference claims if an equivalent local claim (e.g. claim for a penalty or deferred payment claim) has a rank lower than the unsecured non preference claims .

Preference receiving countries will face adjustments as a result of erosion of their preference margins.

The existence of preferential customs barriers.

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Preferences were important to Africa, and solutions to the issue of preference erosion should be found within the WTO negotiations.

On the other hand, greater focus of non reciprocal trade preferences on LDCs and other structurally weak and vulnerable economies may aim to further strengthen such preferences in the spirit of the Marrakesh Ministerial Decision on Measures in Favour of LDCs and the Singapore Ministerial Declaration.

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The enterprise s access to preferential finance.

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31. Recent preferential actions in favour of least developed countries, including through improvements in generalized system of preference (GSP) schemes, were recounted.

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In this regard, we invite all member countries of the GSTP to conclude the Third Round of GSTP by 2006 and encourage other members of the Group of 77 and China to consider participating in the GSTP.

Policy options include tax incentives, R D funds, economic development agencies, incentives for networking and joint ventures.

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