32. As regard conditionalities attached to trade preferences, views differed.

Some developed countries are attaching social and environmental clauses to the granting of GSP preferences.

It was stressed that conditionalities have always been attached to the autonomous granting of trade preferences.

(i) UNCTAD should continue to analyse the ways and means of enhancing the utilization of the existing GSP preferences, of improving the functioning of such preferences and their attendant rules of origin, and of adapting the GSP to present realities.

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.

(b) Provision of material, equipment and technologies, on concessional terms, to Annex III countries

Japan has MFN, preferential and temporary tariffs on fresh and processed vegetables.

One way preferences

According to Li Yan, an analyst at OilChem, there is no big changes in the preferential sales promotion strategy for gas stations. At present, the preferential price of main stations such as Sinopec is 0.5 0.7 yuan liter, while the preferential rate for private gas stations is 0.5 . 1.2 yuan liter.

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.

Conversely, it was stated that the imposition of conditionalities implies that in reality there is reciprocity in the supposedly non reciprocal trade preferences.

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

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.

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.

spin off benefits (theme 1)

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.

Judicious protection measures, combined with financial support and access to relevant technologies, plus the strengthening of preferential arrangements such as the Lomé Convention and the Generalized System of Preferences, would help to create a level playing field for all countries.

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The EU applies extensive preferences to agricultural imports from African Caribbean and Pacific (ACP) countries.

Invite all the parties involved to conclude the Third Round of GSTP by 2006 and encourage other developing countries to consider participating in the GSTP.

Even for countries that enjoyed preferential trading agreements such as those parties to the Cotonou Agreement between the European Union and ACP countries, these stringent standards reduced the value of trade preferences.

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

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

The lack of supply capacity continued to limit the fuller utilization of preferences.

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.

Consequently, even many preferential ACP rates remain at peak levels.

On the other hand, non reciprocal preferential trade arrangements (e.g. GSP, the Caribbean Basin Initiative (CBI), the Canadian Programs for Commonwealth Caribbean Trade Investment and Industrial Cooperation (CARIBCAN), the Lomé Convention) facilitate market access for beneficiary developing countries.

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The enterprise s access to preferential finance.

As regarded the new geography of international economic relations, UNCTAD had emphasized the role of South South cooperation through, among others, the third round of Generalized System of Trade Preferences (GSTP) negotiations.

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

For instance, UNCTAD estimates have found that during the 2001 2002 period, 61 per cent of exports of least developed countries to the Quadrilateral Group of Industrialized Economies (Canada, the European Union (EU), Japan and the United States of America) faced most favoured nation tariffs owing to their exclusion from the Generalized System of Preferences or other preferential schemes or their inability to qualify for the preferential treatment and the complexity of utilizing the schemes.

Calls upon the Member States to accede to the Framework Agreement on Trade Preferential System so as to take part in the trade negotiation under the Agreement.

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

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Certificate of origin of the Generalized System of Preferences