The Generalised System of Preferences (GSP) is a formal system of exemption from the general rules of the World Trade Organization (WTO) aimed at encouraging developing countries to export by allowing their products preferential access to the markets of developed countries.
GSP, specifically, provides exemption from the Most Favored Nation (MFN) principle that requires WTO member countries to treat the imports of all other WTO member countries no worse than they treat the imports of their "most favored" trading partner. In essence, MFN requires WTO member countries to treat imports coming from all other WTO member countries equally by imposing equal tariffs on them.
GSP was adopted in the United Nations in 1968. According to resolution 21 (II) passed at the United Nations Conference on Trade And Development (UNCTAD) in New Delhi in 1968, the objectives of the generalized, non-reciprocal, non-discriminatory system of preferences in favour of the developing countries, including special measures in favour of the least advanced among the developing countries, are:
(a) to increase their export earnings;
(b) to promote their industrialization; and
(c) to accelerate their rates of economic growth.
Under GSP schemes of preference-giving counties, selected products originating in developing countries are granted reduced or zero tariff rates over the MFN rates.
There are currently 13 national GSP schemes in operation. The following countries grant GSP preferences: Australia, Belarus, Bulgaria, Canada, Estonia, the European Union, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States of America.
The EU's GSP is managed by the European Commission. In managing the GSP, the Commission is assisted by the Committee on Generalised Preferences, composed of representatives of Member States and chaired by the Commission. This Committee has to be consulted before certain measures are taken. More important measures need to be supported by a qualified majority of Member States.
The EU’s GSP programme classifies benefiting developing countries as standard beneficiary country, least developed country and GSP+ country, with countries classified as GSP+ country receiving most preferential rates including duty-free access for 7200 products.
To benefit as a GSP+ country, the applying countries need to demonstrate that their economies are poorly diversified, and therefore dependent and vulnerable. Poor diversification and dependence is defined as meaning that the five largest sections of its GSP-covered imports to the EU must represent more than 75% of its total GSP-covered imports. GSP-covered imports from that country must also represent less than 1% of total EU imports under GSP.
In addition to the above, must also ratify and effectively implement the 16 core conventions on human and labour rights and 7 (out of 11) of the conventions related to good governance and the protection of the environment.
Bolivia, Colombia, Costa Rica, Ecuador, Georgia, Guatemala, Honduras, Sri Lanka, Republic of Moldova, Mongolia, Nicaragua, Panama, Peru, El Salvador and Venezuela benefit from the EU’s existing GSP+ scheme which runs from 1 January 2006 to 31 December 2008.
Countries wishing to receive GSP+ status from 2009 onwards must apply by October 2008. For future eligibility, applying countries will need to have ratified 27 international conventions on human rights, labour standards, environmental protection, and governance principles by 31 December 2008.
Core human and labour rights UN/ILO Conventions that must be ratified and effectively implemented for GSP Plus to apply are:
• International Covenant on Civil and Political Rights
• International Covenant on Economic Social and Cultural Rights
• International Convention on the Elimination of All Forms of Racial Discrimination
• Convention on the Elimination of All Forms of Discrimination Against Women
• Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment
• Convention on the Rights of the Child
• Convention on the Prevention and Punishment of the Crime of Genocide
• Minimum Age for Admission to Employment (N° 138)
• Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour (N° 182)
• Abolition of Forced Labour Convention (N° 105)
• Forced Compulsory Labour Convention (N° 29)
• Equal Remuneration of Men and Women Workers for Work of Equal Value Convention (N° 100)
• Discrimination in Respect of Employment and Occupation Convention (N° 111)
• Freedom of Association and Protection of the Right to Organise Convention (N° 87)
• Application of the Principles of the Right to Organise and to Bargain Collectively Convention (N°98)
• International Convention on the Suppression and Punishment of the Crime of Apartheid
• Montreal Protocol on Substances that deplete the Ozone Layer
• Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
• Stockholm Convention on persistent Organic Pollutants; Convention on International Trade in Endangered Species
• Convention on Biological Diversity
• Cartagena Protocol on Biosafety; Kyoto Protocol to the UN Framework Convention on Climate Change; UN Single Convention on Narcotic Drugs (1961)
• UN Convention on Psychotropic Substances (1971); UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
• Mexico UN Convention Against Corruption.
GSP, specifically, provides exemption from the Most Favored Nation (MFN) principle that requires WTO member countries to treat the imports of all other WTO member countries no worse than they treat the imports of their "most favored" trading partner. In essence, MFN requires WTO member countries to treat imports coming from all other WTO member countries equally by imposing equal tariffs on them.
GSP was adopted in the United Nations in 1968. According to resolution 21 (II) passed at the United Nations Conference on Trade And Development (UNCTAD) in New Delhi in 1968, the objectives of the generalized, non-reciprocal, non-discriminatory system of preferences in favour of the developing countries, including special measures in favour of the least advanced among the developing countries, are:
(a) to increase their export earnings;
(b) to promote their industrialization; and
(c) to accelerate their rates of economic growth.
Under GSP schemes of preference-giving counties, selected products originating in developing countries are granted reduced or zero tariff rates over the MFN rates.
There are currently 13 national GSP schemes in operation. The following countries grant GSP preferences: Australia, Belarus, Bulgaria, Canada, Estonia, the European Union, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States of America.
The EU's GSP is managed by the European Commission. In managing the GSP, the Commission is assisted by the Committee on Generalised Preferences, composed of representatives of Member States and chaired by the Commission. This Committee has to be consulted before certain measures are taken. More important measures need to be supported by a qualified majority of Member States.
The EU’s GSP programme classifies benefiting developing countries as standard beneficiary country, least developed country and GSP+ country, with countries classified as GSP+ country receiving most preferential rates including duty-free access for 7200 products.
To benefit as a GSP+ country, the applying countries need to demonstrate that their economies are poorly diversified, and therefore dependent and vulnerable. Poor diversification and dependence is defined as meaning that the five largest sections of its GSP-covered imports to the EU must represent more than 75% of its total GSP-covered imports. GSP-covered imports from that country must also represent less than 1% of total EU imports under GSP.
In addition to the above, must also ratify and effectively implement the 16 core conventions on human and labour rights and 7 (out of 11) of the conventions related to good governance and the protection of the environment.
Bolivia, Colombia, Costa Rica, Ecuador, Georgia, Guatemala, Honduras, Sri Lanka, Republic of Moldova, Mongolia, Nicaragua, Panama, Peru, El Salvador and Venezuela benefit from the EU’s existing GSP+ scheme which runs from 1 January 2006 to 31 December 2008.
Countries wishing to receive GSP+ status from 2009 onwards must apply by October 2008. For future eligibility, applying countries will need to have ratified 27 international conventions on human rights, labour standards, environmental protection, and governance principles by 31 December 2008.
Core human and labour rights UN/ILO Conventions that must be ratified and effectively implemented for GSP Plus to apply are:
• International Covenant on Civil and Political Rights
• International Covenant on Economic Social and Cultural Rights
• International Convention on the Elimination of All Forms of Racial Discrimination
• Convention on the Elimination of All Forms of Discrimination Against Women
• Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment
• Convention on the Rights of the Child
• Convention on the Prevention and Punishment of the Crime of Genocide
• Minimum Age for Admission to Employment (N° 138)
• Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour (N° 182)
• Abolition of Forced Labour Convention (N° 105)
• Forced Compulsory Labour Convention (N° 29)
• Equal Remuneration of Men and Women Workers for Work of Equal Value Convention (N° 100)
• Discrimination in Respect of Employment and Occupation Convention (N° 111)
• Freedom of Association and Protection of the Right to Organise Convention (N° 87)
• Application of the Principles of the Right to Organise and to Bargain Collectively Convention (N°98)
• International Convention on the Suppression and Punishment of the Crime of Apartheid
• Montreal Protocol on Substances that deplete the Ozone Layer
• Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal
• Stockholm Convention on persistent Organic Pollutants; Convention on International Trade in Endangered Species
• Convention on Biological Diversity
• Cartagena Protocol on Biosafety; Kyoto Protocol to the UN Framework Convention on Climate Change; UN Single Convention on Narcotic Drugs (1961)
• UN Convention on Psychotropic Substances (1971); UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
• Mexico UN Convention Against Corruption.
