Sheep’s Clothing

The United Nations whacked the European Union’s trade rules as ‘protectionist’, with tough eligibility requirements effectively shutting out poor countries. The United Nations whacked the European Union’s trade rules as ‘protectionist’, with tough eligibility requirements effectively shutting out poor countries.

The EU has come most under attack for its tough Rules of Origin criteria, which specifies the amount of local inputs and value addition needed to be eligible for trade breaks.

The levels are often high and unachievable for a majority. Though boosting exports in some countries, preference schemes also suffer from limited product coverage and uncertain duration, the UN said in its Human Development Report for 2005.

“Rules of origin are often deployed as protectionist trade barriers. For entry to the European Union, exporting countries must add “the majority” of the value to export products,” the UN said.

“The sheer complexity of the rules, allied to unrealistic value-added requirements, undermines the capacity of poor countries to make use of preferences.”

Under current Rules of Origin in the EU’s GSP Plus scheme, apparel needs