Generalised System of Preferences (GSP) 2009-2011 - guide
24 July 2008by eub2 -- last modified 24 July 2008
The Generalised System of Preferences scheme - The GSP is an autonomous trade arrangement through which the EU provides non-reciprocal preferential access to the EU market to 176 developing countries and territories, in the form of reduced tariffs for their goods when entering the EU market.
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The GSP scheme is implemented by a Council Regulation applicable for a period of three years at a time. It covers three separate preference regimes:
(i) the standard GSP, which provides preferences to 176 Developing
Countries and Territories on over 6300 tariff lines;
(ii) the special
incentive arrangement for Sustainable Development and Good Governance, known as
GSP+, which offers additional tariff reductions to support vulnerable
developing countries in their ratification and implementation of relevant
international conventions in these fields; and
(iii) the Everything
But Arms (EBA) arrangement, which provides Duty-Free, Quota-Free
access for the 50 Least-Developed Countries (LDCs).
The primary objective
of the GSP is to contribute to the reduction of poverty and the promotion of
sustainable development and good governance. Tariff preferences on the EU
market enable Developing Countries to participate more fully in international
trade and generate additional export revenue to support implementation of their
own sustainable development and poverty reduction policy strategies.
There has been a significant increase in recent years in the value of
preferential imports under GSP. Imports under the scheme totalled €51
billion in 2006 (an increase of 10% over 2005) and €57 billion in 2007 (an
increase of 12% over 2006). The current Regulation especially focused
preferences on those countries most in need of the benefits from trade. In this
regard, imports from LDCs increased by 35% in 2006 and then remained broadly
stable in 2007, while GSP+ beneficiaries saw a rise in their exports to the EU
of 15% in 2006 and a further 10% in 2007.
The new GSP Regulation for
2009-11
With the current three-year phase of GSP set to expire at the end
of 2008, the Commission made a proposal for a successor regulation on 21
December 2007. Following the opinion of the European Parliament, the EU General
Affairs and External Relations Council adopted a regulation on 22 July 2008
applying a new GSP scheme for the period from 1 January 2009 to 31 December
2011.
In response to desires expressed by users of GSP to ensure
continued stability, predictability and transparency, the scheme remains broadly
unchanged. However, it does implement some technical changes, in particularly
taking account of evolutions in trade flows.
Graduation and
De-graduation
Whenever an individual country's performance on the EU
market over a three-year period exceeds or falls below a set threshold,
preferential tariffs are either suspended or re-established. These
calculations are made on the basis of Product Sections established in the
Harmonised System for classification of goods for trade. This graduation
mechanism is only relevant for GSP and GSP+ preferences: LDC access under EBA is
not at all affected. Graduation is triggered when a country becomes competitive
in one or more product groups and is therefore considered no longer to be in
need of the preferential tariff rates.
As a result of the
re-calculations made on trade data for the period 2004-06, GSP preferences will
be re-established for six countries and suspended for one, in the following
beneficiary country and product group combinations:
De-graduation
(re-establishment of preferences):
- Algeria, Section V (Mineral products)
- India, Section XIV (Jewellery, pearls, precious metals and stones)
- Indonesia, Section IX (Wood and articles of wood)
- Russia, Section VI (Products of the chemical or allied industries) and Section XV (Base metals)
- South Africa, Section XVII (Transport equipment)
- Thailand, Section XVII (Transport equipment)
Graduation
(suspension of preferences):
- Vietnam, Section XII (Footwear, headgear, umbrellas, sun umbrellas, artificial flowers, etc....)
The net effect of these adjustments
is worth at least €160 million to beneficiary countries in terms of import
duties that would otherwise be imposed.
GSP+
At present, 14
beneficiary countries have qualified to receive the additional preferences
offered under the GSP+ incentive arrangement. This lapse at the end of 2008.
Any country, including current GSP+ beneficiaries, which wishes to receive GSP+
preferences from January 2009, will have to submit an application before 31
October.
According to the qualifying criteria, any GSP+ beneficiary
country must be considered "vulnerable" and have ratified and effectively
implemented 27 specified international conventions in the fields of human
rights, core labour standards, sustainable development and good governance. The
Commission will prepare a separate information notice for potential GSP+
applicants on the applicable criteria and the procedures to follow. (to be
available shortly).
For countries that do not yet meet the GSP+
qualifying criteria this year, the new Regulation provides an additional
opportunity for applications in mid-2010. This is an added advantage under the
new rules, so that potential applicants which do not yet meet all the criteria
are not obliged to wait three years before being able to re-apply.
EBA
A small adjustment is made in the liberalisation timetable
for sugar. In order to ensure coherence with the EU marketing year (which now
begins on 1 October every year rather than 1 July) and the results of recent
Economic Partnership Agreements (EPA) negotiations with ACP countries (many of
which are also LDCs), full liberalisation of sugar imports from LDCs will now
take place on 1 October 2009 instead of 1 July as previously intended. The new
Regulation also incorporates a minimum price arrangement for sugar, again so as
to ensure coherence with the results of EPA negotiations. This minimum price
arrangement will apply from 1 October 2009 to 30 September
2012.
Beneficiary countries list:
Two countries (Myanmar and
Belarus) remain temporarily withdrawn from GSP preferences on the basis of
Council Regulations (EC) No 552/97 and No 1933/2006 respectively, as the reasons
for their withdrawals still persist.
Moldova was already removed from the
beneficiary list of the current GSP Regulation at the same time as the EC
granted it more far-reaching autonomous preferences under a separate legal
instrument in March 2008. This removal is confirmed in the listing of
beneficiary countries of the new Regulation.
Trade Volumes under
GSP and Value of Preferences
On the basis of trade data for 2007, the
overall volumes of EU imports under each of the three GSP regimes and the rough
value of the preferences provided in terms of nominal duty loss if the same
products had been imported and duties paid under the EU's standard MFN
conditions of access were as follows:
2007
|
GSP Preferential Imports (€ millions)
|
Nominal Duty Loss (€ millions)
|
standard GSP
|
47,848
|
1.542
|
GSP+
|
4,900
|
0.501
|
EBA
|
4,302
|
0.505
|
Total
|
57,050
|
2.548
|
These figures in fact slightly under-estimate the value of GSP for
developing countries, since they do not factor in all reductions in tariff
preferences applied to specific duty rates.
Source: European Commission