Directorate-General for Trade

Generalised System of Preferences (GSP)

The EU's Generalised System of Preferences is a trade arrangement through which the EU provides preferential access to the EU market to 176 developing countries and territories, in the form of reduced tariffs for their goods when entering the EU market. There is no expectation or requirement that this access be reciprocated. It is implemented by a Council Regulation applicable for a period of three years at a time. GSP covers three separate preference regimes:

• The standard GSP, which provides preferences to 176 Developing Countries and Territories on over 6200 tariff lines;
• The special incentive arrangement for sustainable development and good governance, known as GSP+, which offers additional tariff reductions to support vulnerable developing countries in their ratification and implementation of international conventions in these areas;
• The Everything But Arms (EBA) arrangement, which provides Duty-Free, Quota-Free access for all products for the 49 Least Developed Countries (LDCs).

The primary objective of the GSP is to contribute to the reduction of poverty and the promotion of sustainable development and good governance. Preferential tariff rates when exporting to the EU market enable Developing Countries to participate more fully in international trade and generate additional export revenue to support them in developing industry and jobs and reducing poverty.

The EU adopted a regulation on 22 July 2008 applying a new GSP scheme for the period from 1 January 2009 to 31 December 2011.

• Presentation given to WTO Delegations on the EU's GSP Scheme (12 March 2009).

GSP+

For the period 2009-2011, 16 beneficiary countries have qualified to receive the additional preferences offered under the GSP+ incentive arrangement. Any GSP+ beneficiary country must be considered "vulnerable" in terms of its size or the limited diversification in its exports. Poor diversification and dependence is defined as meaning that the five largest sections of its GSP-covered imports to the Community must represent more than 75% of its total GSP-covered imports. GSP-covered imports from that country must also represent less than 1% of total EU imports under GSP.

GSP+ beneficiaries must also have ratified and effectively implemented 27 specified international conventions in the fields of human rights, core labour standards, sustainable development and good governance.

• Information Notice for countries wishing to apply for GSP+ as from 1 July 2010
• Commission Decision on the list of beneficiary countries which qualify for GSP+ for the period 01/01/09 to 31/12/11
• List of countries considered "vulnerable" in the sense of Article 8 of the GSP Regulation 2009-2011 (28 July 2008)

Graduation and degraduation

Whenever an individual country's performance on the EU market over a three-year period exceeds or falls below a set threshold, preferential tariffs are either suspended or re-established.  This graduation mechanism is only relevant for GSP and GSP+ preferences: LDC access under EBA is not at all affected.  Graduation is triggered when a country becomes competitive in one or more product groups and is therefore considered no longer to be in need of the preferential tariff rates – it is a sign of growing export success!

Trade Volumes under GSP and Value of Preferences

On the basis of trade data for 2008, the overall volumes of EU imports under each of the three GSP regimes and the rough value of the preferences provided in terms of nominal duty loss if the same products had been imported and duties paid under the EU's standard MFN conditions of access were as follows:

Trade volumes under Generalised System of Preferences and Value of Preferences

2008	GSP Preferential Imports (€ millions)	Nominal Duty Loss (€ millions)
Standard GSP	56.900	2.050
GSP+	5.800	577
EBA	5.800	657
Total	68.600	3.284

These figures in fact slightly under-estimate the value of GSP for developing countries, since they do not factor in all reductions in tariff preferences applied to specific duty rates.

Supporting information

• Conventions
• Legislation and policy
• Technical amendments
• Historical regulations

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