The EU's Generalised System of Preferences
16 July 2009by inadim -- last modified 20 July 2009
The EU's Generalised System of Preferences is a trade arrangement through which the EU provides 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 EU's Generalised System of Preferences is a trade arrangement through which the EU provides 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. There is no expectation or requirement that this access be reciprocated. It is implemented by a Council Regulation applicable for a period of three years at a time. GSP covers three separate preference regimes:
The standard GSP, which provides preferences to 176 Developing Countries and Territories on over 6300 tariff lines;
- 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 international conventions in these areas;
- The Everything But Arms (EBA) arrangement, which provides Duty-Free, Quota-Free access for all products 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. Preferential tariff rates when exporting to the EU market enable Developing Countries to participate more fully in international trade and generate additional export revenue to support them in developing industry and jobs and reducing poverty.
Imports under the scheme totalled €51 billion in 2006 and €58.6 billion in 2007. Imports from Least Developed Countries increased by 35% in 2006 and remained broadly stable in 2007. GSP+ beneficiaries saw a rise in their exports to the EU of 15% in 2006 and a further 10% in 2007.
The EU adopted a regulation on 22 July 2008 applying a new GSP scheme for the period from 1 January 2009 to 31 December 2011. An update on changes in the 2009-2011 scheme is available.
GSP+
For the period 2009-2011, 16 beneficiary countries have qualified to receive the additional preferences offered under the GSP+ incentive arrangement. Any GSP+ beneficiary country must be considered "vulnerable" in terms of its size or the limited diversification in its exports. Poor diversification and dependence is defined as meaning that the five largest sections of its GSP-covered imports to the Community must represent more than 75% of its total GSP-covered imports. GSP-covered imports from that country must also represent less than 1% of total EU imports under GSP.
GSP+ beneficiaries must also have ratified and effectively implemented 27 specified international conventions in the fields of human rights, core labour standards, sustainable development and good governance.
List of countries considered "vulnerable" in the sense of Article 8 of the GSP Regulation 2009-2011
Graduation and degraduation
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. 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 – it is a sign of growing export success!
Source: European Commission
