AGREEMENT REACHED ON NEW PACT FOR GLOBAL SYSTEM OF TRADE PREFERENCES

Foz do Iguaçu, Brazil, December 17- Ministers of developing country parties to the Global System of Trade Preferences (GSTP) concluded six years of negotiations with a new agreement that will slash tariffs by 20% on at least 70% of products exported and subject to duty among eight countries, with more expected to join the agreement.

There are 43 parties to the GSTP. Twenty-two of them participated in the six-year Sao Paulo round of negotiations, eight of which (including the Mercosur group of countries of South America) exchanged tariff concessions by adopting the Sao Paulo Round Protocol annexed to the round´s Final Act. The Protocol allows the reduced tariffs within this group of participants. Other parties are expected to join the Protocol at a later date.

The agreement is expected to provide a further boost to South-South trade - commercial exchanges between developing countries that already are a major source of economic growth, both for developing nations and for the global economy.

The negotiations were launched in 2004 on the occasion of the UNCTAD XI quadrennial conference in Sao Paulo, Brazil. The parameters of the tariff-cutting formula were agreed to at a ministerial meeting held in Geneva in December 2009.

GSTP member states, through a technical cooperation agreement with the UNCTAD Secretariat that is implemented through its Trade Division, draws on the organization´s substantive and technical support in negotiations and in implementation of the GSTP.

The GSTP, which was established in 1989, provides a framework for preferential tariff concessions and other measures of cooperation to stimulate trade between developing countries. The Sao Paulo Round results broadened product coverage to 47,000 tariff lines and deepened the tariff cuts. It will provide significant benefits for the expansion of intra-group South-South trade.

The ministerial session was held in Foz do Iguaçu and chaired by Antônio Patriota, the Secretary-General of the Ministry of External Relations of Brazil. Ministers and high-ranking officials participating in the Sao Paulo Round attended the meeting along with UNCTAD´s Deputy Secretary-General Petko Draganov.

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