About the EU GSP | gsphub (2024)

FAQs

About the EU GSP | gsphub? ›

The Generalised Scheme of Preferences (GSP) is a EU trade scheme that grants eligible developing countries preferential access to the European market and thereby contributes to poverty reduction and development by expanding exports from vulnerable countries.

In October 2023, the European Parliament unanimously voted to extend the GSP+ status for another four years until 2027 for developing countries, including Pakistan, to enjoy duty-free or minimum duty on exports to the European market.

The GSP rules of origin are, in principle, based on the concept of single-country origin, that is, the origin requirements must be fully met within one exporting preference-receiving country, which must also be the country where the finished products are manufactured.

The EU GSP+ serves as a special incentive arrangement to promote good governance and sustainable development by facilitating trade. The incentive grants Pakistan zero-rated or preferential tariffs on nearly 66% of tariff lines, enhancing the country's ability to export to the EU market.

The Generalized System of Preferences (GSP) grant zero or reduced tariff rates to beneficiary countries. Least developed countries (LDCs) generally receive preferential treatment for certain products and deeper tariff cuts.

The EU's Generalised Scheme of Preferences Plus (GSP+) gives developing countries a special incentive to pursue sustainable development and good governance. In return, the EU cuts its import duties to zero on more than two thirds of the tariff lines of their exports. Expiry: The current GSP+ is valid until 2027.

This extension guarantees that GSP beneficiary countries will continue to enjoy tariff preferences for the period 2024-2027. The extension of the GSP Regulation underscores the EU's commitment to supporting poverty eradication, sustainable economic growth and increased export opportunities for low-income countries.

Generalised Scheme of Preferences in a nutshell

The EU's GSP comprises three arrangements: Standard GSP for low and lower-middle income countries. This means a partial or full removal of customs duties on two-thirds of tariff lines. GSP+ : a special incentive arrangement for sustainable development and good governance.

The EU's Generalised Scheme of Preferences (GSP) was first introduced in 1971, with the EU playing a leading role in establishing a policy of unilateral trade preferences for poverty reduction and development that has since been mirrored by most industrialised economies.

Eligibility. Goods that are either wholly the growth, product, or manufacture of, or is a new or different article of commerce that has been grown, produced, or manufactured in, a beneficiary developing country may qualify for duty-free entry under GSP.

What is GSP and how does it work? ›

GSP promotes economic growth and development in the developing world. GSP promotes sustainable development in beneficiary countries by helping these countries to increase and diversify their trade with the United States. The GSP program provides additional benefits for products from least developed countries.

The Generalized System of Preference (GSP) is a unilateral scheme wherein custom duty preferences or concessions are granted by developed countries to export of specified products from developing countries.

The following 15 countries grant GSP preferences: Armenia, Australia, Belarus, Canada, the European Union, Iceland, Japan, Kazakhstan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey, United Kingdom and the United States of America.

Expiration of GSP SPI “A,” “A+,” and “A*” On December 31, 2020, the GSP SPIs (“A,” “A+,” and “A*”) expired and is currently pending Congressional action to pass legislation for the program's renewal.

Congress first authorized the U.S. program in Title V of the Trade Act of 1974. The European Union and other developed countries have implemented similar programs since the 1970s. The U.S. GSP program expired on December 31, 2020 despite legislative efforts to extend the program in the 116th Congress.

Despite the US being the EU's largest trade and investment partner, there is no dedicated free trade agreement between the EU and the US. The Transatlantic Trade and Investment Partnership (TTIP) negotiations were launched in 2013, but ended without conclusion at the end of 2016. They were formally closed in 2019.