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Generalised Scheme of Preferences (GSP)

EU’s GSP removes import duties from products coming into the EU market from vulnerable developing countries. This helps developing countries to alleviate poverty and create jobs based on international values and principles, including labour and human rights.

Almost 50 years ago, the United Nations Conference on Trade and Development asked developed countries to help developing countries integrate into the world economy. The Generalised Scheme of Preferences (GSP) was born and today, about a dozen countries have GSP mechanisms in place.

Find the scheme that benefits your country

 

Generalised Scheme of Preferences in a nutshell

The European Union’s GSP is widely recognised as the most progressive in terms of coverage and benefits.

The EU offers:

  • Standard GSP for low and lower-middle income countries. This means a partial or full removal of customs duties on two third of tariff lines.
  • GSP+: the special incentive arrangement for sustainable development and good governance. It slashes these same tariffs to 0% for vulnerable low and lower-middle income countries that implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance.
  • EBA (Everything But Arms): the special arrangement for least developed countries, providing them with duty-free, quota-free access for all products except arms and ammunition.

List of GSP beneficiary countries, on 1 January 2019

Conditions

Developing countries are automatically granted GSP if they:

  • Are classified as having an income level below "upper middle income" by the World Bank
  • Do not benefit from another arrangement (like a Free Trade Agreement) granting them preferential access to the EU market  

In addition, if granted GSP+, beneficiaries are required to ratify 27 international conventions (see GSP+ above) and to cooperate with the Commission to monitor implementation of these conventions.

Least-developed countries are automatically granted the benefits of the ‘Everything But Arms’ arrangement, even if they have another arrangement in place.

All GSP beneficiary countries have to respect the principles of fifteen core conventions on human rights and labour rights listed in the GSP Regulation.

Monitoring

The EU continuously monitors GSP+ beneficiary countries’ effective implementation of the 27 international conventions on human rights, labour rights, environmental protection, and good governance. This monitoring includes exchanges of information, dialogue and visits and involves various stakeholders, including civil society.

The Commission publishes a report on the implementation of GSP every two years on the progress made by the GSP+ beneficiary countries in implementing the 27 international conventions.

Report for 2016-2017 and its country annexes.

Enhanced engagement with other GSP beneficiaries

As announced in Trade for all, the EU has stepped up its engagement with three GSP beneficiary-countries: Bangladesh, Cambodia and Myanmar.

The EU is engaging with these countries due to the gravity of alleged shortcomings in respecting core human rights and labour rights standards, as testified by reports from the United Nations, the International Labour Organization, and civil society.

EBA preferences can be removed if beneficiary countries fail to respect core human rights and labour rights. The EU has launched the process that could lead to the temporary suspension of Cambodia's preferential access to the EU market under the Everything But Arms trade scheme.

Beneficiary Countries

Country-specific information

GSP+: Armenia, Bolivia, Cabo Verde, Kyrgyzstan, Mongolia, Pakistan, The Philippines, Sri Lanka

GSP enhanced engagement: Bangladesh, Cambodia, Myanmar

Impact of GSP

A 2018 GSP midterm evaluation shows that the EU’s GSP is delivering.

From 2011 to 2017, EU imports from the beneficiary countries increased by 44%. EBA countries saw their exports to the EU increase by 125% and GSP+ beneficiaries by 82%.

The evaluation also indicates that countries increasingly use the available trade preferences and diversify their exports. Moreover, GSP+ beneficiaries saw an economic incentive for making progress in ratifying and implementing the 27 international conventions required under GSP+.

Involving Stakeholders

European Parliament and Council

The Commission regularly reports to the European Parliament and the Council on GSP matters. The Commission also regularly answers questions from Members of the European Parliament (MEPs). These questions (and responses) and related issues can be found on the European Parliament's website.

Oversight of GSP by the Council is done through the Working Party on the Generalised System of Preferences.

In addition the Commission chairs the Expert Group on the Generalised Scheme of Preferences and the Generalised Preferences Committee, which gather expert representatives from each member state to oversee and vote on issues related to the GSP.

Industry

The GSP Regulation has several ways to ensure that interests of European industries are safeguarded:

  • GSP beneficiaries that become 'Upper Middle Income' Countries are removed from GSP.
  • GSP beneficiaries can lose preferences for specific product categories which are deemed to have become sufficiently competitive: suspended tariff preferences for 2017-2019.
  • Safeguard measures can be requested by EU industry based on evidence that imports from a GSP beneficiary have caused serious economic difficulties for that industry: safeguard measures on rice from Cambodia and Myanmar.

Contact

For any further questions regarding the GSP, please contact TRADE-GSP@ec.europa.eu