EU Generalised Scheme of Preferences (GSP)

Country / jurisdiction: European Union · Year: 2023 · Status: In force · Level: National · Type: Voluntary

Introduced in 1971, the EU's Generalised Scheme of Preferences (GSP) has been a pioneering policy in offering unilateral trade preferences for poverty reduction and development, a model now adopted by many industrialised economies. The modern GSP categorises into three tiers based on a country's development level:

General GSP: Eligible beneficiaries receive duty reductions on 66% of tariff lines imported into the EU.

GSP+: Offers zero duties on 66% of tariff lines for developing countries that implement core conventions related to human rights, labour, governance, and sustainable development.

Everything but Arms (EBA): Provides duty-free access for imports from Least Developed Countries (LDCs), excluding weapons.

These arrangements are part of the EU's commitment to sustainable development and good governance, automatically including developing countries below ‘upper middle income’ and LDCs, even with other market access. All GSP beneficiaries must respect 15 core human rights and labour conventions.

The GSP includes mechanisms for compliance and protection:

Withdrawal Mechanism: Temporary preference withdrawal for serious violations like human and labour rights breaches, prison labour use, customs control shortcomings, non-compliance with anti-terrorism and money laundering conventions, unfair trading practices, or fishery organisation infringements.

Safeguard Mechanism: Protects European producers from challenges due to preferential imports, with the Commission authorised to reinstate duties in urgent cases.

Specific Safeguards: For textiles, agriculture, and fisheries, exempting EBA beneficiaries or countries with less than 6% of EU GSP imports.

The GSP can apply to the minerals trade in Europe, and with the withdrawal mechanism the GSP can cut trade benefits for countries that abuse human rights, which could disrupt the supply and increase prices of important minerals.

Official source: https://gsphub.eu/about-gsp