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.
2014 - New GSP preferences apply
The date of acceptance of the customs declaration for release for free circulation of the goods - by the customs authorities of the Member State of importation - determines whether a particular import is treated under the previous preferences or under the new preferences.
The reformed GSP, which will apply as from 2014, 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 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) arrangement 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 smoothly to the new scheme, it was decided that the new preferences would apply as of 1 January 2014.
With a view to ensure a smooth application of the reformed preferential scheme, the EU issued a number of additional rules and decisions:
- In December 2012, the EU identified a list of products that had become so competitive that they no longer needed GSP support to effectively penetrate the EU market. These products will no longer receive GSP preferences as from 1 January 2014 until 31 December 2016 when the list will be reviewed. This decision, however, does not apply to countries which qualify for GSP+ status in the period concerned (Costa Rica and Ecuador at this stage).
- In February 2013, the EU released procedural rules on how to treat the applications for the GSP+ arrangementunder the new GSP.
- In February 2013, a decision deferring the GSP preferences from Azerbaijan and Iran due to their economic development level as from 23 February 2014 was published.
- In November 2013, procedural rules for temporary withdrawals of preferences and application of safeguards under the new Scheme were issued.
- In December 2013, a decision identifying the countries which will cease to benefit from the GSP due to their economic development level as from 1 January 2015 was released. Moreover, this decision ensures that South Sudan continues to benefit from the recently acquired EBA arrangement under the new GSP Scheme and that Myanmar/Burma is reinstated also in the new GSP Scheme.
- First ten countries qualified for the enhanced GSP+ preferences and started to benefit from them as from 1 January 2014.
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:
- Concentrating GSP preferences on developing countries most in need. A number of countries, which do not require GSP preferences to be competitive, 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 during three consecutive years, according to World Bank classification.
- A number of overseas countries and territories, which have an alternative EU 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 should 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 have become even more transparent, with clearer, better defined legal principles and objective criteria.
More details in the The EU’s new Generalised Scheme of Preferences and Presentation Highlights of the EU’s new General Scheme of Preferences factsheets.
More on Generalised Scheme of Preferences
- Documents related to the new GSP regulation
- Press pack to the new GSP Regulation
- Memo "South Sudan granted duty-free, quota-free preferences under the GSP scheme”
- Press release: "EU re-opens its market to Myanmar/Burma"