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Generalised System of Preferences

26 August 2006
by eub2 -- last modified 11 September 2006

The EU's generalised scheme of tariff preferences (GSP) offers lower tariffs or completely duty-free access for imports from 178 developing countries and territories into the EU market. The EU's scheme grants special benefits for the 49 least developed countries and to countries implementing certain labour or environmental standards. The EU grants the preferences without asking for concessions from the beneficiary countries. In 2002, EU imports benefiting from GSP preferences amounted to EUR 53 billion.


Trade has proved to be one of the most effective tools to foster development. Increased trade with developing countries will enhance their export earnings, promote their industrialisation and encourage the diversification of their economies. The classical instrument for achieving these objectives is tariff preferences, that is to say that the goods we import from developing countries are not submitted to the normal customs duties. Tariff preferences provide an incentive to traders to import products from developing countries, and help them to compete on international markets.

In 1968, the United Nations Conference on Trade and Development (UNCTAD) recommended the creation of a "Generalised System of Tariff Preferences" under which industrialised countries would grant trade preferences to all developing countries. This authorises developed countries to establish individual GSP schemes.

The European Community was the first to implement a GSP scheme in 1971. The EU's GSP grants products imported from GSP beneficiary countries either duty-free access or a tariff reduction, depending on which of the GSP arrangements a country enjoys. The EU's GSP is implemented following cycles of ten years, for which general guidelines are drawn up. Guidelines for the period 2006 - 2015 were adopted in 2004. In practice, the GSP is implemented by means of Council regulations, during the ten-year cycle. Based on the guidelines of 2004, a new GSP scheme was adopted on 27 June 2005, through Council Regulation (EC) No 980/2005. This regulation applies from 1.1.2006 to 31.12.2008, but the provisions concerning the special incentive scheme for sustainable development and good governance (the "GSP-plus" or "GSP+" incentive) applied already from 1.7.2005. The special arrangements to combat drug production and trafficking provided for by Regulation No. 2501/2001 are repealed from that same date. All texts may be found in the list of legislation on the relevant page of this website.

For the period 01.01.2006 - 31.12.2008, there are three types of arrangement in force for beneficiary countries, under the EU's GSP in Regulation (EC) No 980/2005:

  • all beneficiary countries enjoy the benefit of the general arrangement;
  • the special incentive arrangement for sustainable development and good governance (the "GSP+") provides additional benefits for countries implementing certain international standards in human and labour rights, environmental protection, the fight against drugs, and good governance (see Commission Decision 2005/924/EC for the list of GSP+ beneficiary countries);
  • the special arrangement for the least-developed countries (LDCs), also known as the "Everything But Arms" (EBA) initiative, provides for the most favourable treatment of all, in the aim of granting the LDCs "duty-free and quota-free" access to the EU's market.

The GSP User's Guide (yet to be updated with the recent changes) explains the main features of the GSP.

The Guide to the rules of origin explains the requirements which products covered by the GSP have to meet, for being considered as originating in the exporting country. For more general information on the rules of origin, see also the rules of origin webpage. A reform of the GSP rules of origin is in hand (see New developments in the DG Taxation and Customs Union website). The new rules are expected to come into force in the course of 2006.

See also:

  • The Export Helpdesk for Developing Countries helps exporters expand their exports to the EU. It includes GSP tariffs, document requirements, rules of origin, specific requirements for import of products to EC, internal taxes applicable to products and also allows the search for business partners.

User's Guide to the European Union's Scheme of Generalised Tariff Preferences

Source: European Commisison