The EU’s GSP removes import duties for products entering the EU market from vulnerable developing countries. This helps developing countries alleviate poverty and create jobs based on international values and principles, including human rights and labour rights.
Almost 50 years ago, the United Nations Conference on Trade and Development – UNCTAD urged developed countries to help developing countries integrate into the world economy. The Generalised System of Preferences (GSP) was thus born and today about a dozen countries have GSP mechanisms in place.
The EU’s GSP is widely recognised as the most progressive in terms of coverage and benefits.
The EU offers:
– standard GSP for low- and middle-income countries. This means a partial or total removal of customs duties on two-thirds of tariff lines;
– GSP+: the special incentive arrangement for sustainable development and good governance. It reduces these tariffs to 0% for vulnerable low and lower middle income countries that implement 27 international conventions on human rights, labour rights, environmental protection and good governance;
– EBA (Everything But Arms): the special arrangement for Least Developed Countries (LDCs), which provides them duty and quota free access for all products except for arms and ammunition.
Developing countries automatically qualify for GSP if:
– they are classified by the World Bank as having an income level below “upper middle income”;
– they do not benefit from any other agreement (such as a free trade agreement) that grants them preferential access to the EU market.
Furthermore, once GSP+ has been granted, beneficiaries are obliged to ratify 27 international Conventions and cooperate with the European Commission in monitoring the implementation of these Conventions. The EU continuously monitors the effective implementation by GSP+ beneficiary countries of the 27 international Conventions on human rights, labour rights, environmental protection and good governance. This monitoring includes exchanges of information, dialogue and visits and involves various stakeholders, including civil society.
LDCs automatically receive the EBA scheme benefits even if they have another scheme in place. EBA preferences can be removed if beneficiary countries do not respect fundamental human and labour rights.
All GSP beneficiary countries must respect the principles of fifteen core human and labour rights Conventions listed in the GSP regulation.
The GSP regulation provides for several ways to ensure that the European industries’ interests are safeguarded:
– GSP beneficiaries that become ‘upper middle-income’ countries are removed from the GSP;
– GSP beneficiaries may lose preferences for specific product categories that are deemed to have become sufficiently competitive;
– Safeguard measures may be requested by EU’s industry on the basis of evidence that imports from a GSP beneficiary country have caused severe economic hardship to that industry.