What is GSP+ ?

Generalised Scheme of Preferences (GSP)

The EU’s “Generalised Scheme of Preferences” (GSP) allows developing countries 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.

As from 1 January 2014, the EU’s reformed GSP applies. The reformed Scheme focuses support on developing countries most in need.

Generalised Scheme of Preferences in a nutshell

EU-funded ILO project on labour rights in GSP+ countries

There are three main variants (arrangements) of the GSP 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 mean 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 core 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 implementation of the reformed GSP requires regular adoption of additional legislation:

  •  In December 2012, the EU identified a list of products that had become so competitive that they no longer need support to be successfully exported to the EU. These products no longer receive GSP preferences as from 1 January 2014 until 31 December 2016 when an updated list will start applying. This decision, however, does not apply to countries which benefit from GSP+ status in the period concerned.
  •  In February 2013, the EU released procedural rules on how to treat the applications for the GSP+ arrangement under the reformed GSP.
  •  First ten countries qualified for the enhanced GSP+ preferences and started to benefit from them as from 1 January 2014.  This included Pakistan.

The European Commission has provided a grant to the International Labour Organisation (ILO) for a 2-year pilot-project to strengthen the capacity of public administrations to apply the eight Fundamental ILO Conventions that are considered as fundamental principles and rights at work. The project was launched on 1 October 2015 and covers El Salvador, Guatemala, Mongolia and Pakistan. These are all countries that have committed to apply the Fundamental ILO Conventions listed under the preferential trade arrangements with the EU, namely the GSP+ arrangement and bilateral trade agreements. The capacity of the selected countries will be strengthened to help them to meet their obligations under these Conventions, including on reporting. Such assistance will consist of ILO technical assistance, workshops, trainings, as well as awareness-raising activities.

Similar projects for other countries benefitting from trade preferences under the GSP+ arrangement are currently under development.

EU trade and Generalised Scheme of Preferences

Main features of the reformed GSP:

  • Concentrate GSP preferences on developing countries most in need. A number of countries, which do not require GSP preferences to be competitive on the EU markets, no longer benefit from the Scheme, namely:
    • Countries that have another 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 the World Bank classification.
    • A number of overseas countries and territories, which are either attached to the EU and so have an alternative EU market access arrangement or are linked to another developed country.
  • Reinforce the trade incentives for the respect of core human and labour rights, environmental protection and good governance standards through the GSP+arrangement.
  • Strengthen the effectiveness of the trade concessions for least-developed countries (LDCs) through the “Everything But Arms” arrangement. Reducing GSP to fewer beneficiaries reduces competitive pressure and makes the preferences for LDCs more meaningful.
  • Increase predictability, transparency and stability of the GSP. With the exception of EBA, which has no expiry date, the new Scheme is to last 10 years, instead of 3 previously. This makes 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 on The EU’s Generalised Scheme of Preferences (factsheets)

More on Generalised Scheme of Preferences