(1)

By Council Regulation (EC) No 2501/2001 of 10 December 2001 applying a scheme of generalised tariff preferences for the period 1 January 2002 to 31 December 2004 (3), the Community granted generalised tariff preferences to Laos.

(2)

Commission Regulation (EEC) No 2454/93 establishes the definition of the concept of originating products to be used for the purposes of the scheme of generalised tariff preferences (GSP). However, Regulation (EEC) No 2454/93 provides for derogations in favour of least-developed GSP-beneficiary countries which submit an appropriate request to that effect to the Community.

(3)

Laos has benefited from such a derogation for certain textiles since 1997, in the last instance by virtue of Commission Regulation (EC) No 1613/2000 of 24 July 2000 derogating from Regulation (EEC) No 2454/93 in respect of the definition of the concept of originating products used for the purposes of the scheme of generalised preferences to take account of the special situation of Laos regarding certain exports of textiles to the Community (4), as amended by Regulation No 291/2002 (5), which extended its validity until 31 December 2004. By letters dated 4 May 2004 and 4 August 2004, Laos has submitted a request for the renewal of this derogation.

(4)

The request submitted by Laos has been considered by the Commission and has been found to be duly substantiated.

(5)

When the validity of Regulation No 1613/2000 was extended, it was considered that its expiry should coincide with the ending of the current GSP scheme, which was due to end on that date. However, Regulation No 2211/2003 (6) extended the validity of the GSP scheme for a further year, until 31 December 2005.

(6)

On 18 December 2003 the Commission published a Green Paper on the future of rules of origin in preferential trade arrangements (7) which opened a wide-ranging debate on the subject. On 7 July 2004 it published a Communication to the Council, the European Parliament and the Economic and Social Committee entitled ‘Developing countries, international trade and sustainable development: the function of the Community’s generalised system of preferences (GSP) for the 10-year period from 2006 to 2015’ (8), which also acknowledged the need for change in rules of origin. However, no decisions have yet been taken and no new rules will be in place before 31 December 2004.

(7)

A prolongation of the derogation should not prejudge or prejudice the outcome of discussions on possible new rules of origin for GSP. However, the interests of traders concluding contracts both in Laos and in the Community, as well as the stability and the sustained development of the Lao industry in terms of ongoing investment and employment, require that the derogation should be prolonged for a period of time sufficient to permit the continuation or conclusion of longer-term contracts, while facilitating the transition to possible new rules of origin for GSP.

(8)

The provisions of Regulation (EC) No 1613/2000, in particular the existence of quantitative limits, which apply on an annual basis, reflecting the Community market's capacity to absorb the Lao products, Laos's export capacity and actual recorded trade flows, were designed to prevent injury to the corresponding branches of Community industry.

(9)

The derogation should therefore be renewed until 31 December 2006. However, in order to ensure fair treatment both for Laos and for other least developed countries, the continuing need for the derogation should be reviewed once any new rules of origin are adopted in the context of the new GSP.

(10)

Regulation (EC) No 1613/2000 should therefore be amended accordingly.

(11)

The measures provided for in this Regulation are in accordance with the opinion of the Customs Code Committee,

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in Article 2, ‘ 31 December 2004 ’ is replaced by ‘ 31 December 2006 ’;

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the following paragraph is added: