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Generalised Scheme of Preferences (GSP)

The EU's "Generalised Scheme of Preferences" (GSP) allows developing country exporters to pay less or no duties on their exports to the EU. This gives them vital access to EU markets and contributes to their economic growth.

As from 1 January 2014, the EU's reformed GSP set out by Regulation 978/2012 applies. This reformed Scheme focuses support on developing countries most in need.

Generalised Scheme of Preferences in a nutshell

There are three main variants (arrangements) of the Scheme:

  • the standard/general GSP arrangement, which offers generous tariff reductions to developing countries. Practically, this means partial or entire removal of tariffs on two thirds of all product categories.
  • the "GSP+" enhanced preferences mean full removal of tariffs on essentially the same product categories as those covered by the general arrangement. These are granted to countries which ratify and implement core international conventions relating to human and labour rights, environment and good governance;
  • "Everything but Arms" (EBA) arrangement for least developed countries (LDCs), which grants duty-free quota-free access to all products, except for arms and ammunitions.

The EU adopted a reformed GSP law on 31 October 2012 (Regulation No 978/2012). In order to allow ample time for economic operators to adapt smoothly to the new scheme, it was decided that the reformed preferences would apply as of 1 January 2014.

Until the end of 2013, the preferences under the previous Scheme applied on the basis of Regulation No 732/2008, extended by the GSP "Roll-over" Regulation.

With a view to ensure a smooth application of the reformed preferences, the EU issued a number of additional rules and decisions:

The codes of the EU Combined Nomenclature can be subject to small adjustments at the end of every year. In case of discrepancy between the CN codes which are included in Annexes V and IX and the adjusted codes included in the TARIC database, the latter will be of application.

EU trade and Generalised Scheme of Preferences

Main features of the reformed GSP:

  • Concentrate GSP preferences on developing countries most in need. A number of countries, which do not require GSP preferences to be competitive on the EU markets, no longer benefit from the Scheme, namely:
    • Countries that have another preferential access to the EU which is at least as good as under GSP – for example, under a Free Trade Agreement or a special autonomous trade regime.
    • Countries which have achieved a high or upper-middle income per capita during three consecutive years, according to the World Bank classification.
    • A number of overseas countries and territories, which are either attached to the EU and so have an alternative EU market access arrangement or are linked to another developed country.
  • Reinforce the trade incentives for the respect of core human and labour rights, environmental and good governance standards through the GSP+ arrangement.
  • Strengthen the effectiveness of the trade concessions for least-developed countries through the "Everything But Arms" arrangement. Reducing GSP to fewer beneficiaries reduces competitive pressure and makes the preferences for LDCs more meaningful.
  • Increase predictability, transparency and stability of the GSP. With the exception of EBA, which has no expiry date, the new Scheme is to last 10 years, instead of 3 previously. This makes it easier and more interesting for EU importers to purchase from GSP beneficiary countries. In addition, procedures have become even more transparent, with clearer, better defined legal principles and objective criteria.

More details on The EU’s new Generalised Scheme of Preferences (factsheets)