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About GSP

The EU’s Generalised Scheme of Preferences (GSP) was first introduced in 1971, with the EU playing a leading role in establishing a policy of unilateral trade preferences for poverty reduction and development that has since been mirrored by most industrialised economies. Over time, the GSP has emerged as a core pillar of the EU’s commitment to the role of trade in sustainable development.

The modern GSP categorises three tiers of tariff preferences and commitments based on a beneficiary country’s level of development. Under the general GSP arrangement, eligible beneficiaries receive duty reductions on 66% of tariff lines imported into the EU. The second arrangement, GSP+, provides the incentive for developing countries to benefit from zero duties on 66% of tariff lines contingent on implementation of core human rights, labour, governance, and other sustainable development conventions. Finally, the Everything but Arms (EBA) arrangement provides duty free access for imports from Least Developed Countries (LDCs), except weapons.

More than 200€ billion worth of goods were sold in the EU in 2018 under the GSP, benefitting EU importers and beneficiary country exporters alike

Beneficiaries 

  • The GSP+ is the special incentive arrangement for Sustainable Development and Good Governance that supports vulnerable developing countries that ratified 27 international conventions on human rights, labour rights, environmental protection and climate change, and good governance.

 

Criteria 

  • GSP+ eligible countries must be considered vulnerable due to a lack of export diversification and insufficient integration within the international trading system. In order to meet the vulnerability criterion, the ratio of the beneficiary’s GSP-covered imports relative to the GSP-covered imports of all countries must be lower than 7.4%. Likewise, the seven largest sections of GSP-covered imports must exceed a threshold of 75% of total GSP imports over a three-year period to fulfil the diversification criterion. 

 

Duty reduction 

  • GSP+ countries can benefit from complete duty suspensions for products across approximately 66% of all EU tariff lines, including sensitive products. 

 

Graduation 

  • The graduation mechanism that applies to specific product groups of Standard GSP countries, does not apply to GSP+ beneficiaries. 
  • A beneficiary country leaves the arrangement when it obtains an agreement for preferential market access or exceeds the World Bank’s definition of a low- or lower-middle income country in three consecutive years. 

 

Monitoring 

  • Upholding the GSP+ status, especially regarding to effective implementation and compliance with reporting obligations of the 27 conventions is managed by EU monitoring. The EU engages in a dialogue with authorities and stakeholders in beneficiary countries and arranges frequent monitoring missions to GSP+ beneficiary countries. The monitoring is reported on every second year in a report to the European Parliament and the Council. Reports by ILO and UN as well as the exchange with civil society organisations are important elements of the monitoring.