Generalised Scheme of Preferences (GSP)
The EU’s "Generalised Scheme of Preferences" (GSP) allows developing country exporters to pay lower duties on their exports to the EU. This gives them vital access to EU markets and contributes to their economic growth.
The reformed GSP, which will apply as from 2014, will further focus support on countries most in need.
"I am delighted that EU Member States and Members of the European Parliament have backed the Commission's proposal to make our preferential import scheme more effective. It was an important recognition that key developing economies have become globally competitive. This now allows us to tailor our pro-development trade scheme to give the countries still lagging behind some additional breathing space and support.” said EU Trade Commissioner Karel De Gucht.
Generalised Scheme of Preferences in a nutshell
There are three main variants (arrangements) of the scheme:
- the standard GSP scheme, 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 means 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 international conventions relating to human and labour rights, environment and good governance;
- "Everything but Arms" (EBA) scheme for least developed countries (LDCs), which grants duty-free quota-free access to all products, except for arms and ammunitions.
The EU has adopted a reformed GSP law on 31 October 2012 - (Regulation No 978/2012). In order to allow ample time for economic operators to adapt to the new scheme, the new preferences will apply as of 1 January 2014.
In December 2012, the EU identified products exported by some of the beneficiaries of the new GSP that had become so competitive that they no longer need support to be successfully exported to the EU. These products will not receive GSP preferences as from 1 January 2014 to 31 December 2016, when the list will be reviewed.
In February 2013, the EU released procedural rules on how to treat the applications for the GSP+ arrangement under the new GSP.
EU trade and Generalised Scheme of Preferences
Main features of the reformed GSP:
- Concentrating GSP preferences on countries most in need. A number of countries, which do not require GSP preferences to be competitive, will no longer benefit from the scheme as from 1 January 2014, including:
- Countries that already have 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, according to World Bank classification.
- A number of overseas countries and territories, which have an alternative market access arrangement for developed markets.
- Reinforcing the 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" scheme. Reducing GSP to fewer beneficiaries will reduce competitive pressure and make the preferences for LDCs more meaningful.
- Increasing predictability, transparency and stability. With the exception of EBA, which has no expiry date, the new scheme will last 10 years, instead of three previously. This will make it easier and more interesting for EU importers to purchase from GSP beneficiary countries. In addition, procedures will become even more transparent, with clearer, better defined legal principles and objective criteria.
More details in the factsheet The EU’s new Generalised Scheme of Preferences and Presentation Highlights of the EU’s new General Scheme of Preferences.
More on Generalised Scheme of Preferences
- Documents related to the new GSP regulation