The European Parliament voted in favour Tuesday of the EU’s new Generalised Scheme of Preference which grants trade preferences to developing countries to help eradicate poverty.
The move represents the final step before the generalised system of preferences (GSP)‘s entry into application on 1 January 2027.
The GSP has been the EU’s preferential trade arrangement with developing countries since 1971. It offers developing countries reduced duties when exporting to the EU with the aim of eradicating poverty, promoting sustainable development, and better integrating these countries in the world economy. The GSP system covers more than 60 countries and 2 billion people around the world.
The new GSP will provide reduced or zero tariffs to imports from 65 developing countries for the next decade, supporting poverty reduction and sustainable development. This is especially relevant at a time of increasing global challenges and uncertainty impacting developing and Least Developed Countries (LDCs).
A cornerstone of EU trade policy, the updated GSP will continue to include the ‘Everything But Arms’ (EBA) initiative, which grants full duty-free access for all goods -except arms and ammunition- from the world’s LDCs. First introduced 25 years ago, EBA will now continue indefinitely, offering long-term stability for the most vulnerable economies.
The updated GSP also strengthens accountability by linking trade benefits more closely to human and labour rights, climate and environment, and good governance. It introduces improved monitoring, greater transparency, and reinforces and updates the links between trade preferences and compliance with international standards. It does so by increasing the number of relevant international conventions beneficiaries must adhere to, and by introducing an urgent withdrawal procedure which allows for the suspension of preferences in case of serious and systemic violations of the principles underpinning such conventions.
Finally, the new GSP includes an automatic safeguard on rice imports, safeguarding EU producers while preserving the development objectives of the scheme. In practice, this means that if imports from a beneficiary rise sharply above the average of their past imports over 10 years, the EU will suspend preferential rates for the rest of the year and introduce a tariff-rate-quota (TRQ) for the following year to prevent market disruption.
Once formally adopted by the Council of the EU, the legislation will be signed and published in the Official Journal of the EU. It will then enter into force and apply for a period of 10 years.
