Generalised Scheme of Preferences (GSP)

On 22 September 2021, the EU Commission proposed new EU Generalised Scheme of Preferences to promote sustainable development in low-income countries. The GSP laws, in the EU and the UK are unilateral trade tools that removes or reduces import duties from products coming into the EU from vulnerable low-income countries. In addition, the rate of duty applicable to an importer’s product can change depending on factors such as the type of programme applicable and the level of country development. As with any free trade agreement, one can only benefit from GSP, if the rules of origin can be met including proof of origin.

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WHAT IS GSP?
GSP removes import duties from products coming into a 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. Today it is operated by countries such as the EU, UK or US..

HOW DOES IT WORK?
Developing countries can be 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 local market

In addition, if granted GSP+, beneficiaries are required to ratify several (usually 20+)international conventions and to cooperate with the national law maker 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.