GSP INSIGHTS

JULY 2021

INTRODUCTION........................3

1. WHAT YOU NEED TO KNOW

ABOUT THE EU’S GSP...........4

2. THE GSP: ECONOMIC

TRENDS........................................7

3. MONITORING THE GSP...... 14

4. WAYS FORWARD................... 18

GSP INSIGHTS
INSIGHTS ON THE EU’S
GENERALISED SCHEME OF
PREFERENCES
Trends - Monitoring - Testimonials

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 GSP INSIGHTS 3

INTRODUCTION
In 1968, the United Nations Conference on Trade and Development
(UNCTAD) asked developed countries to help developing countries
integrate into the world economy.1 In response to this, the EU
has since 1971 maintained a Generalised Scheme of Preferences
(GSP) granting eligible developing countries preferential access
to the European market, thereby facilitating their integration and
participation in global supply and value chains and offering a path
to generate additional revenues through trade.

Through the Generalised Scheme of Preferences (GSP), the EU

makes an important contribution to accompanying developing
countries in their economic and social development objectives
utilising the economic mechanisms of trade. More specifically, the What is the GSP Hub?
GSP aims to
The GSP Hub is an EU-funded project, initiated following the GSP
• contribute to poverty reduction by expanding exports mid-term evaluation of 2018 to increase awareness, transparency,
from vulnerable countries, and to and engagement of stakeholders with the EU’s GSP. It aims at
engaging stakeholders to increase the use of the GSP, through
• promote sustainable development and good governance bringing new EU investment, encouraging European companies
through trade. to import from the beneficiary countries, and promoting the
related international sustainability standards.
The GSP promotes universal values and standards by linking the
preferences to 15 core international conventions on labour and
human rights for all beneficiaries. The GSP+ arrangement goes
further, incentivising adherence to 12 additional international
conventions on environment and good governance through
expanded preferential access to the EU market. This makes the GSP
an important tool, especially regarding efforts to further strengthen
the EU’s trade and sustainable development commitments as
outlined in the latest EU Trade Policy Review Communication.

This publication gathers concise information on the EU’s GSP,

including the most recent trends and insights relating to both the
economic and values objectives of the scheme. It aims to increase
awareness of the benefits and opportunities the GSP offers for
industry stakeholders, civil society, trade unions, and public
authorities in the EU and GSP beneficiary countries.

Beneficiary Countries of the EU’s GSP

GSP+ GSP EBA Preferences temporarily withdrawn EU 27

1 https://unctad.org/topic/trade-agreements/generalized-system-of-preferences
 4 GSP INSIGHTS

WHAT YOU
NEED TO KNOW
ABOUT THE
1. ARRANGEMENTS

What types of different arrangements are there?

EU’s GSP The current GSP offers three tiers of tariff line reductions on EU imports based
on a beneficiary country’s level of development. Under the standard GSP
arrangement, eligible beneficiaries receive duty reductions on 66% of tariff
lines imported into the EU. The second arrangement, the special incentive
arrangement for sustainable development and good governance (GSP+), offers
additional incentives to developing countries. It removes duties on 66% of
tariff lines, including full duty suspension on sensitive goods, contingent on the
implementation of 27 core human rights, labour, governance, and climate and
environmental conventions. Finally, the Everything but Arms (EBA) arrangement
provides duty-free and quota-free access for all imports from Least Developed
Countries (LDCs), except arms and ammunition.

Standard GSP GSP+ EBA

• vulnerable
• low or lower-middle developing
income countries countries, with
(as classified by the • Least Developed
limited export
World Bank) Countries
Beneficiaries diversification and
(as classified by the
a low share of total
• no other trade UN)
imports from all
agreement with the
GSP beneficiary
EU in place
countries
• full removal of
tariffs for non-
sensitive goods,
applies to about
26% of tariffs lines • duty-free and
• full removal of quota-free access
Preferences • reduced tariffs for tariffs for 66% of for all products
sensitive goods tariff lines except for arms and
(30% for specific ammunition
duties, 3.5% for ad
valorem duties),
applies to about
40% of tariff lines

• ratification of
27 international
Specific conventions with
none a commitment to none
obligations active participation
in the EU’s
monitoring dialogue
 GSP INSIGHTS 5

2. BENEFICIARIES
Which countries benefit from the scheme?
3. PRODUCTS

What kind of products are eligible for GSP preferences?

The GSP targets low- and lower-middle-income countries,
Under both the standard GSP and the GSP+, preferences are
which do not benefit from any other preferential access to the
granted on around 66% of tariff lines, in total more than 6000
EU market. Least Developed Countries, as categorised by the
products. For the standard GSP, products are classified either
United Nations (UN), are automatically granted the benefits
as sensitive or non-sensitive. While non-sensitive products
of the ‘Everything But Arms’ arrangement, even if they have
enjoy duty-free access to the EU market, sensitive products are
other arrangements already in place. To date, 67 countries
granted duty reductions.4 The EBA provides duty-free and quota-
from Asia, Africa, the Pacific, and South America benefit from
free access for all products except arms and ammunition and
the EU’s GSP scheme. The 2012 GSP reform significantly
covers more than 9000 tariff lines.5
decreased the number of beneficiary countries, so that the
ones most in need would be able to make use of the scheme. The coverage of products under the GSP is very generous.
GSP tariffs and zero most-favoured-nation (MFN) duties
How long do GSP benefits last? together cover more than 90% of all tariff lines. Products
outside the GSP mainly include agricultural goods.
A standard GSP or GSP+ beneficiary country ceases to
benefit from the preferential market access if they enter
other preferential agreements with the EU or if a country How are certain products removed from GSP eligibility?
is classified by the World Bank as a high- or upper-
middle-income country in three consecutive years.2 EBA Internationally competitive products traded under the GSP
beneficiaries cease benefitting from the arrangement three cease to benefit from preferential market access. This ensures
years after they have graduated from the ‘Least Developed that preferences are provided to those countries and products
Country’ category as defined by the United Nations. These most in need and avoids competitive pressure among GSP
countries can still benefit from the standard GSP or GSP+ beneficiaries. This mechanism is called product graduation.
after graduating from the EBA.3 Product sections graduate if they exceed a threshold of 57%
in total EU imports from all GSP beneficiaries (Textiles: 47.2%,
Plants/Oils: 17.5%) as an average over three consecutive years.
Current Beneficiaries of the EU’s GSP The list of graduated product sections is reviewed by the EU
every three years.6 Under the current regulation, this graduation
GSP+ - 9 beneficiaries mechanism only applies to beneficiaries of the standard GSP,
• Armenia* • Kyrgyzstan • Philippines as EBA and GSP+ beneficiary countries are considered more
• Bolivia • Mongolia • Sri Lanka vulnerable due to their less diversified export bases.
• Cabo Verde • Pakistan • Uzbekistan

Standard GSP – 11 beneficiaries What are safeguard mechanisms?

• Congo (Rep.) • Kenya • Syria
• Cook Islands • Micronesia • Tajikistan The GSP regulation allows for a reintroduction of tariffs on a
• India • Nigeria • Vietnam* specific product if this product is imported in volumes and/
• Indonesia • Niue • Iran (will be added) or at prices which cause serious economic difficulties to
European producers. The European Commission can initiate
EBA – 47 beneficiaries
safeguard measures independently or can be encouraged to
• Afghanistan • Congo (DRC) • Malawi • South do so by EU Member States, legal entities, or any association.
• Angola • Djibouti • Mali Sudan Prior to a reintroduction of tariffs, the European Commission
• Bangladesh • Eritrea • Mauritania • Sudan
• Benin • Ethiopia • Mozambique • Tanzania investigates the implications on EU producers, considering for
• Bhutan • Gambia • Myanmar • Timor- example market share, production capacity, employment, and
• Burkina Faso • Guinea • Nepal Leste capacity utilisation by a beneficiary country.
• Burundi • Guinea- • Niger • Togo
• Cambodia Bissau • Rwanda • Tuvalu In addition, the European Commission examines the
(preferences • Haiti • Sao Tome & • Uganda
partially • Kiribati Principe • Vanuatu* development of GSP imports in the textiles, agricultural and
withdrawn) • Lao PDR • Senegal • Yemen fisheries sectors every year. Tariff preferences can be removed
• Central • Lesotho • Sierra Leone • Zambia if imports from a certain beneficiary country increased by more
African Rep. • Liberia • Solomon than 13.5% in quantity (by volume) or exceeded the specific
• Chad • Madagascar Islands
• Comoros • Somalia graduation threshold. This specific safeguard mechanism
does not apply to EBA beneficiaries nor countries with a share
* Armenia will graduate 12/2021, Vietnam will leave the standard GSP on
12/2022, Vanuatu graduated from the LDC category in 12/2020 below 6% of total GSP covered EU imports.7

2 See GSP Regulation (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02012R0978-20170101&from=EN), Chapter II, Article 4.1

3 See GSP Regulation, Chapter IV, Article 17.2
4 See GSP Regulation, Chapter II, Article 7
5 See GSP Regulation, Chapter IV, Article 18.1
6 See GSP Regulation, Chapter II, Article 8
7 See GSP Regulation, Chapter VI
 6 GSP INSIGHTS

4. PROCEDURE

How does the procedure work? What steps need to be How do the rules of origin work under the GSP?
taken to benefit from the GSP?
A product is considered as originating in a GSP beneficiary
The GSP is a unilateral scheme, meaning that preferences country if it has been ‘wholly obtained’, or ‘sufficiently
are provided on a non-reciprocal basis. Eligible countries worked or processed from imported materials’. If a product
with a status below upper-middle-income country are is manufactured using imported materials, product-specific
automatically granted standard GSP beneficiary status, and criteria lay out the level of processing needed to comply with
LDCs are automatically included in the EBA. Conversely, the rules of origin. Businesses can use the EU Access2Markets
countries need to formally apply to the GSP+. The application database which provides further information on tariffs, rules
is reviewed by the European Commission and is subject to of origin, and other requirements for access to the EU market.9
objection by the European Parliament and the Council.8

5. VALUES
How is the GSP connected to international values and How does the EU support beneficiaries in implementing
standards? the international human and labour rights standards?
The GSP takes an integrated approach to promote sustainable The support provided by the GSP+ monitoring is
development by requiring all GSP beneficiaries to respect complemented by a number of capacity building projects,
fundamental human and labour rights, as stated in the often in close cooperation with international monitoring
respective core conventions by the UN and the International bodies, such as the UN and the ILO but also with local
Labour Organisation (ILO). This objective is taken one step authorities and civil society.
further with the GSP+, which commits beneficiary countries
to additional ratification and effective implementation of the
27 international conventions linked to the GSP+, including on
environmental protection and good governance. What happens if a GSP beneficiary falls short on its
commitments?

How is compliance with core international values The GSP regulation has a lifespan of ten years, thus, taking
monitored? a mid- to long-term perspective on progress related to the
international sustainability standards. The monitoring process
The EU engages in monitoring activities with GSP+ is designed to support countries in creating structures which
beneficiaries and encourages the effective implementation deliver tangible progress in implementing the international
of the 27 international conventions covered by the conventions. Should the Commission have reasonable
regulation. This monitoring involves ongoing dialogue and doubt that a beneficiary country falls short on its reporting
information exchange with the authorities of beneficiary obligations, appears to be uncooperative or shows no efforts
countries, as well as a variety of other stakeholders, including to maintain ratification and effective implementation of
international institutions and civil society. More information the covered conventions, the Commission can launch an
on the functioning of the GSP+ monitoring process can be investigation.10 This investigation can lead to a temporary
found on page 14. withdrawal of preferences. On 12 February 2020, the
European Commission decided to temporarily withdraw part
of the preferences from Cambodia due to having observed
What does ‘enhanced engagement’ mean? continuous and systematic human rights abuses.
The EU has intensified its engagement with three EBA
beneficiary countries – Bangladesh, Cambodia, and Myanmar
– to systematically address continuous concerns with regards
to compliance with fundamental human and labour rights.

8 See GSP Regulation (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02012R0978-20170101&from=EN), Chapter III, Article 10

9 See GSP Regulation, Chapter VII, Article 33
10 See GSP Regulation, Chapter III, Article 15
 GSP INSIGHTS 7

THE GSP: ECONOMIC TRENDS

The GSP aims to promote sustainable development and alleviate Total imports from GSP countries by tariff regime in 2019
poverty through the reduction or suspension of duties on imports
Other € 2.26 bn
from developing countries. Through the full or partial removal of
import duties, the GSP facilitates access to the European market and
enhances export opportunities for lower- and lower-middle-income
countries. It assists beneficiary countries in reaching their economic GSP positive
growth and sustainable development objectives and fosters trade € 20.54 bn
flows between the EU and countries in the Global South .
MFN
Recent economic data on trade flows between the EU and GSP positive
beneficiary countries suggests that the current GSP is delivering with € 22.63
regards to its objectives. The scheme specifically supports the most bn
vulnerable countries as the utilisation of preferences is particularly MFN
high among Least Developed Countries which are beneficiaries of zero
the EBA. This group of countries also recorded the highest increase € 86.69
bn
in preferential imports to the EU between 2017 and 2019.
Total imports
ECONOMIC OBJECTIVE GSP zero
€ 185.08 bn
€ 52.94
✓ The GSP particularly supports most vulnerable countries bn

✓ Most GSP beneficiaries expanded their exports to

the European market between 2017 and 2019

✓ Beneficiary countries make considerable use of the This relevance is also reflected in the high utilisation of preferences
preferences granted by the GSP granted by the GSP. An average of 85% of all eligible EU imports
made use of the preferences granted by the three arrangements.
The majority of preferential imports entered under the standard
THE GSP IS EFFECTIVE GSP (about 46%). EU imports under the EBA accounted for a
share of 40%, while EU imports from GSP+ beneficiary countries
Several studies and evaluations of the GSP11 suggest that the accounted for a share of about 14%. This comparatively minor
economic impact in countries benefitting from these trade preferences share of imports from GSP+ beneficiary countries, however, stems
is substantial and includes for example the expansion of exports to from the relatively small but growing number of GSP+ beneficiary
the EU under preferential terms and increased export diversification. countries compared to standard GSP and EBA beneficiaries.
The most recent findings further confirming the effectiveness of Total and preferential imports by type
the GSP can be found in the 2021 study in support of an impact Totalof
and preferential imports
arrangement (2019) by type of
assessment for the review of the GSP. arrangement (2019)
In 2019, about 40% of overall EU imports from LDCs and lower or
lower- middle income countries used preferential tariffs granted by
the GSP. Of these preferential imports, about € 52.94 billion were Standard GSP
imported under zero GSP tariffs, while an additional € 20.54 billion € 33.78 bn
benefitted from positive GSP tariffs. A large share of imports from
GSP beneficiary countries, about 47%, already benefitted from zero Total GSP Preferential
MFN duties.12 imports imports
40% EBA
€29.48 bn

GSP+ €10.29 bn

11 E.g. Copenhagen Economics. (2015). Assessment of Economic Benefits Generated by the EU Trade Regimes Towards the Developing Countries,
p. 17 as well as Mid-Term Evaluation of the GSP (2018), p. 7f.
12 If not indicated otherwise, data are based on GSP Statistics 2020
 8 GSP INSIGHTS

Development of export values to the EU between 2017 and 2019

total export value increased

total export value stagnated

or decreased

INCREASING RELEVANCE EXPANSION OF EXPORTS

Since the GSP regulation came into effect in 2014, the share of GSP As visualised in the map, the majority of GSP beneficiary countries,
preferential imports from beneficiary countries has been constantly 43 countries in total, expanded their exports to the EU between
increasing, while the overall share of imports traded under MFN 2017 and 2019. On the other hand, 28 beneficiaries experienced
duties decreased. stagnating or declining exports. These include six countries, which
have not utilised GSP preferences in recent years. Apart from
MFN DUTIES AND GSP PREFERENCES Armenia, all GSP+ countries experienced an increase of their total
exports to the EU between 5% (Philippines) and 24% (Bolivia).
The most-favoured-nation principle ensures that trading
While the largest number of beneficiaries is located on the African
partners are treated equally. This implies that benefits granted
continent, most preferential exports originate from Asian beneficiary
to one trading partner must be given to all trading partners countries. Nonetheless, total EU imports from African beneficiaries
who are members of the WTO. Special preferences given increased by 27% between 2017 and 2019. This increase can be
to developing countries are exempt from this principle. It is mainly attributed to growth in preferential imports by 15% from
possible, however, that for certain products traded under the Western African beneficiary countries. Likewise, trade relations with
GSP, zero MFN duties apply. In this case, products are often Asian beneficiaries further intensified. Exports making use of the
traded under MFN duties rather than GSP preferences. preferential market access increased by another 6% between 2017
and 2019.
GSP preferences compared to MFN duties are particularly important
for EBA countries. 70% of total EU imports in 2019 from EBA IMPORTS 2014 vs 2019
beneficiaries utilised preferences granted by the EBA, while only Total Eligible Preferential
25% of imports entered under MFN duties. GSP tariffs vis-à-vis MFN imports imports imports
tariffs are similarly important for GSP+ countries. 51% of total EU
imports from GSP+ beneficiary countries were imported using GSP+ Standard GSP -10% +16% +22%
preferences, while about 37% of imports benefitted from zero MFN
duties. This indicates that the duty suspension tied to sustainability GSP+ +49% +71% +66%
criteria introduced by the last GSP reform is highly relevant for EBA +13% +60% +73%
GSP+ beneficiary countries.
TOTAL -1% +35% +44%
For beneficiaries of the standard GSP, duty levels set at the MFN
rates play a more important role than GSP preferences, which are
currently only used for 28% of EU imports from these countries.

This shows that despite a growing number of Free Trade Agreements,

the preferences granted by the GSP remain relevant.
 GSP INSIGHTS 9

Total, preferential, and eligible imports per arrangement

200

Billion
180

42
160
40
36
140
20
19
120 18

100

80
31
27 29
60 118 123 29
109 25 27
11 12
11
40 10
9 9

20 40 42 44
31 32 34

0
Total Eligible Preferential Total Eligible Preferential Total Eligible Preferential
2017 2018 2019

GSP GSP+ EBA

THE GSP SUPPORTS MOST VULNERABLE COUNTRIES duties, indicating that GSP preferences are well used.

The graph above indicates total, eligible, and preferential imports Between 2017 and 2019, the preference utilisation rate has been
from GSP beneficiary countries between 2017 and 2019. Eligible slightly increasing across all three arrangements. Considering
imports refer to those imports eligible for GSP preferential tariffs. the last seven years, both the preference utilisation rate and
Eligible imports exclude imports which already benefit from zero MFN eligible imports show some fluctuations over time. Imports under
tariffs. Preferential imports describe the share of eligible imports the standard GSP experienced the largest variability in terms of
which make use of the tariff preferences granted by the EU’s GSP. preference utilisation, which coincided with the graduation of China
and Thailand from the GSP on 1 January 2015.
Between 2014 and 2019, GSP beneficiary countries experienced
an upward trend of both eligible and preferential imports across all Preference utilisation of GSP+ beneficiaries has been rather constant
three arrangements. This trend, however, was most pronounced for over the last seven years. Despite a continuous reduction of the
EU imports from EBA and GSP+ beneficiary countries. number of beneficiary countries, the utilisation of preferences has
been consistently above 80% since 2014, indicating that there is no
At the same time, EU imports from EBA and GSP+ beneficiary countries significant variation of preference utilisation among beneficiaries.
showed a significantly higher sectoral concentration compared to
imports from beneficiaries of the standard GSP as depicted in the EBA beneficiaries traditionally have the highest preference utilisation
graphs below. Hence, the preference utilisation was more evenly across all three arrangements. The preference utilisation rate stood
distributed across all sectors for beneficiaries of the standard GSP. well above 90% for most of the years under consideration.
Overall, this suggests that the more generous tariff reductions
granted by the EBA and GSP+ are indeed targeted towards the less As with regards to individual GSP beneficiary countries, a number
diversified and more vulnerable economies. This is also reflected in of countries increased their uptake of GSP preferences. The highest
the particularly high preference utilisation rates (PUR) of EBA and increase in the preference utilisation rate between 2017 and 2019
GSP+ beneficiary countries. was recorded by Guinea Bissau, Liberia, Somalia and Tonga. Many
of these countries, however, started from very low or even zero
GSP PREFERENCES ARE WELL USED utilisation rates. In addition, several countries which already made
good use of the preferences in the past, further increased their
In 2019, the EU imported goods worth about €185 billion from GSP preferential imports. These include for example Myanmar (+111%),
beneficiary countries. About €53 billion entered the EU under zero Sri Lanka (+29%), Bangladesh (+15%), and Ethiopia (+13%).
duties, while another €21 billion were imported under positive GSP

Preferential imports from Preferential imports from Preferential imports from

standard GSP beneficiaries GSP+ beneficiaries EBAimports
Preferential beneficiaries
from EBA beneficiaries
Tobacco
Metals
Fish
Clothing Footwear

Leather Clothing
Footwear
Clothing
Foodstuffs

Plastics Machinery
Machinery
Leather Textiles
 10 GSP INSIGHTS

From a sectoral perspective, the utilisation of preferences is TEXTILES REMAIN MOST IMPORTANT PRODUCT SECTION
particularly high for the most prominent product sections traded
under the GSP. In 2019, for example, the utilisation rates were Traditionally, textiles and textile articles are the product group taking
especially high for imports of horticultural products (98%), footwear the greatest advantage of GSP preferences, and they still accounted
(95%), wood products (95%), and hides and skins (95%). It remains for more than half of the preferential imports under the GSP in 2019.
evident, that for product sections with low total values of eligible Footwear ranked second, followed by machinery and appliances.
imports, preferences remain underutilised. This has been the case Between 2017 and 2019, a few less prominent product sections are
for example for imports of coffee, tea, and spices (PUR of 35%), among the product groups which experienced the largest increase
pearls and precious metals (57%), and machinery (65%). in preferential imports. This includes for example chemical products
(+60%), animal products (59%) cork articles (+28%), and metals
Eligible imports and preference utilisation (+27%). Likewise, preferential imports of transportation equipment
GSP: Eligible imports and preference utilisation (+23%), prepared foodstuffs (+21%), and machinery (+16%) also
Standard GSP experienced substantial growth between 2017 and 2019.
50 100%
Billions

45 90% There is some variation visible when it comes to the share of different
40 80%
product sections under the different arrangements. Clothing and textile
35 70%
articles remain the most important product group across all three
30 60%
25 50%
arrangements. For beneficiaries of the standard GSP and the GSP+,
20 40%
there is a tendency towards manufactured products, including for
15 30% example machinery and leather goods. Preferential imports from EBA
10 20% beneficiaries, predominantly focus on textiles and footwear articles.
5 10% Nonetheless, there has been a small trend towards processed and
0 0% manufactured articles in recent years. Prepared foodstuffs, leather,
2013 2014 2015 2016 2017 2018 2019 and plastic articles as well as machinery experienced the strongest
GSP Eligible GSP PUR growth between 2017 and 2019.
GSP+: Eligible imports and preference utilisation Five most prominent product sections under the three
14 GSP+ 100% arrangements (2019)
Billions

90%
12
80% Standard GSP
10 70%
8 60%
50%
6 40%
4 30%
20% Clothing Footwear Machinery Leather Plastic
2
10%
articles
21% 20% 13% 6%
0 0% 6%
2013 2014 2015 2016 2017 2018 2019 GSP+
GSP+ Eligible GSP+PUR

EBA: Eligible imports and preference utilisation

EBA
35 100%
Billions

90%
30 Clothing Textiles Machinery Food & Leather
80% beverages
25 70% 55% 8% 6% 4%
4%
20 60% EBA
50%
15 40%
10 30%
20%
5
10%
0 0%
2013 2014 2015 2016 2017 2018 2019
Clothing Footwear Fish Metals Tobacco
80% 5% 4% 3% 2%
EBA Eligible EBA PUR
 GSP INSIGHTS 11

The ten largest product sections under the GSP (2019)

2%
3% Textiles & textile articles (€37.6 bn)
3%
4% Footwear, headgear (€8.4 bn)
4%
Machinery and appliances (€5 bn)
4%
Plastics and Rubber (€3.7 bn)

6% Hides & skins, leather (€3 bn)

Processed foodstuffs (€2.8 bn)

55%
7% Live animals and animal products (€2.6 bn)

Chemicals (€2 bn)

Base metals and articles (€2 bn)

12%
Vegetable Products (€1.3 bn)

PREFERENCE MARGINS

To gain insights about the extent to which different product sections Preference margins are determined by the level of MFN duties and
benefit from tariff reductions or suspensions under the GSP, the share of GSP eligible tariff lines. High preference margins result
preference margins are an informative analysis tool. Preference from high tariffs for a product section across the MFN regime and a
margins describe the difference between the MFN rate and the GSP high share of GSP eligible products. Low or zero preference margins,
preferential rate applied to the same product. Thus, the preference on the other hand, result from a high share of products traded under
margin reveals the competitive advantage of the beneficiary country zero MFN rates or a low share of GSP eligible tariff lines.
exporter, compared with non-GSP and non-FTA exporters.

Overview: GSP product sections and preference margins per regime

AV EBA AV GSP+ AV GSP

GSP Product Section No. TL % MFN=0 % GSP Preference Preference Preference
Margin Margin Margin
I. Animals & animal products 956 11.61% 48.12% 6.49% 5.51% 2.12%
II. Vegetable products 552 25.36% 45.47% 4.26% 4.11% 1.63%
III. Animal or vegetable fats 129 17.83% 74.42% 5.44% 5.44% 2.76%
IV. Prepared foodstuffs 869 10.82% 60.87% 10.19% 10.08% 2.95%
V. Mineral products 231 73.16% 25.11% 0.74% 0.74% 0.74%
VI. Chemical products 1226 24.63% 72.10% 4.31% 4.14% 3.62%
VII. Plastics & rubber 301 20.93% 79.07% 4.61% 4.61% 3.91%
VIII. Hides & skins, leather 130 29.23% 63.85% 3.17% 2.96% 2.14%
IX. Wood & wood products 235 50.64% 49.36% 2.19% 2.19% 1.62%
X. Wood pulp products 195 100% 0% 0% 0% 0%
XI. Textiles & textile articles 1149 3.48% 96.00% 8.00% 7.99% 1.60%
XII. Footwear, headgear 106 1.89% 98.11% 8.17% 8.17% 3.68%
XIII. Art. of stone, plaster etc. 234 13.68% 86.32% 4.00% 4.00% 2.62%
XIV. Pearls, stones & metals 58 81.03% 18.97% 0.56% 0.56% 0.56%
XV. Base metals & articles 955 52.15% 44.61% 1.85% 1.76% 1.40%
XVI. Machinery & mech. appl. 1338 28.92% 71.08% 1.93% 1.93% 1.83%
XVII. Transportation equipment 286 11.19% 88.81% 5.16% 5.16% 3.13%
XVIII. Instruments 299 44.82% 53.85% 1.84% 1.84% 1.73%
XIX Arms & ammunition 22 18.18% 0% 0% 0% 0%
XX. Miscellaneous 214 26.64% 73.36% 2.61% 2.61% 2.50%
XXI. Works of art 7 100% 0% 0% 0% 0%
TOTAL 9492 26% 64% 4.62% 4.47% 2.20%
Notes: No. TL represents the number of tariff lines included in a specific product section. % MFN=0 refers to the percentage of tariff lines
which are traded at zero MFN duties, whereas % GSP refers to the tariff lines to which GSP preferences apply. The last three columns
indicate the average preference margins per regime. Tariffs only matter if a country has imports in a particular line, the unweighted
averages indicated are a statistical simplification. Preference margins presented here are not trade-weighted.

Source: Data supplied by the European Commission, author’s calculations

 12 GSP INSIGHTS

In 2019, about 26% of in total 9492 tariff lines were traded at Average preference margins for the 21 GSP product sections
zero tariffs under the MFN regime. The standard GSP13 applied to ranged from 0% to 10.19%. As the highlighted sections of the
6084 tariff lines. 48% of those tariff lines were eligible for zero table show, preferential margins were highest for EBA and GSP+
tariffs, whereas 52% benefitted from reduced tariffs under the beneficiaries in case of prepared foodstuffs, footwear, and textiles
standard GSP. The GSP+14 applied to 6105 tariff lines of which amounting to 8-10%.15 Overall, preference margins were smaller
more than 99% were duty-free. The EBA covered 99.8% of tariff for standard GSP16 beneficiaries, ranging from 0% to 3.91% for
lines, enabling duty-free imports from beneficiary countries for in plastics and rubber. Other sections with high margins for standard
total 9474 tariff lines. GSP beneficiaries included footwear, chemical products, and
transportation equipment.

Top 20 products imported by the EU under the GSP in 2019 and different tariff regimes

GSP Product GSP pref. MFN EBA GSP+ GSP

Product (six-digit level)
Section imports Tariff Tariff Tariff Tariff
HS 610910 T-shirts, singlets, and other vests, knitted or
11 $ 4.45 bn 12% 0% 0% 9.6%
crocheted of cotton
HS 620342 Men’s trousers, bib and brace overalls,
11 $ 3.43 bn 12% 0% 0% 9.6%
breeches, and shorts of cotton
HS 620462 Women’s trousers, bib and brace overalls,
11 $ 2.29 bn 12% 0% 0% 9.6%
breeches, and shorts of cotton
HS 640399 Footwear with outer soles of rubber, plastics,
12 $ 2.26 bn 8% 0% 0% 4.5%
leather or composition leather and uppers of leather
HS 611020 Jerseys, pullovers, cardigans, waistcoats,
11 $ 2.19 bn 12% 0% 0% 9.6%
and similar articles, knitted or crocheted of cotton
HS 611030 Jerseys, pullovers, cardigans, waistcoats, and
11 $ 2.10 bn 12% 0% 0% 9.6%
similar articles, knitted or crocheted of man-made fibres
HS 640411 Sports footwear; tennis shoes, basketball
12 $ 2.06 bn 16.9% 0% 0% 11.9%
shoes, gym shoes, training shoes and the like
HS 610462 Women’s or girls’ trousers, bib and brace
11 $ 1.06 bn 12% 0% 0% 9.6%
overalls, breeches, and shorts of cotton
15 HS 760110 Aluminium, not alloyed $ 0.97 bn 3% 0% 0% 0%
11 HS 620520 Men’s or boys’ shirts of cotton $ 0.92 bn 12% 0% 0% 9.6%
HS 640391 Footwear with outer soles of rubber,
12 plastics, leather or composition leather and uppers of $ 0.82 bn 8% 0% 0% 4.5%
leather covering the ankle
HS 640299 Other footwear with outer soles and uppers
12 $ 0.78 bn 16.8% 0% 0% 11.9%
of rubber or plastics
1 HS 030617 Frozen shrimps and prawns $ 0.76 bn 12% 0% 3.6% 4.2%
HS 610990 T-shirts, singlets and other vests, knitted or
11 $ 0.72 bn 12% 0% 0% 9.6%
crocheted of other textile materials
HS 610510 Men’s or boys’ shirts, knitted or crocheted of
11 $ 0.69 bn 12% 0% 0% 9.6%
cotton
HS 640419 Footwear with outer soles of rubber or
12 $ 0.65 bn 16.9% 0% 0% 11.9%
plastics (other)
HS 420292 Trunks, suitcases, etc. with outer surface of
8 $ 0.61 bn 9.7% 0% 0% 3.3%
sheeting of plastics or of textile materials
HS 382600 Biodiesel and mixtures thereof, not
6 containing or containing < 70 % by weight of petroleum $ 0.52 bn 6.5% 0% 0% 0%
oils or oils obtained from bituminous minerals
11 HS 630231 Bedlinen of cotton $ 0.47 bn 12% 0% 0% 9.6%
HS 420310 Articles of apparel of leather or of
8 $ 0.46 bn 4% 0% 0% 0%
composition leather
Source: UNCTAD database and Access2Markets database

13 See GSP Regulation (https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02012R0978-20170101&from=EN), Annex V

14 See GSP Regulation, Annex IX
15 Tariffs are levied at product level (ten-digit HS Code), the table represents averages of aggregated values (at eight-digit level) per GSP product section.
For the aggregated values at eight-digit level, the highest tariff of the covered products at ten-digit level were used.
16 See GSP Regulation, Annex V
 GSP INSIGHTS 13

It is evident that the share of preferential tariff lines was particularly

high for clothing and footwear/headgear products, the two product
sections which also accounted for most preferential imports in
IMPACT OF THE COVID-19 PANDEMIC
2019. The table above shows the MFN tariffs vis-à-vis the GSP
The Covid-19 pandemic has profound economic and social
tariffs for the top five import products under the GSP. It reveals that
consequences for economies across the globe. Developing
the GSP provides significant benefits to EU imports of, for example,
cotton t-shirts and trousers, as well as shoes from EBA and GSP+ countries and especially LDCs are among the countries most
beneficiary countries. affected by the disruptions caused by the pandemic, putting
hard-earned development gains at risk. With the disruptions of
THE GSP AND EXPORT DIVERSIFICATION international trade flows and supply chains, the pandemic also
impacts broader trends presented in this section. Preliminary
Next to facilitating the access to the EU markets, and thereby supporting
beneficiary countries’ integration in global supply and value chains, data for 2020 suggests that total EU imports from GSP
another important objective of the GSP is to support the diversification beneficiary countries dropped by 13.34% while preferential
of export portfolios. More diversified export portfolios reduce a country’s imports declined by 15.64% compared to the previous year. The
vulnerability to external shocks and increase its export earnings. most vulnerable countries suffered the sharpest contraction:
total and preferential imports from EBA beneficiary countries
There are a variety of economic and institutional factors contributing declined by about 16.66% and 15.34% respectively.
to export diversification, including for example higher foreign direct
investment, a stable macroeconomic environment as well as higher The restrictive measures to contain the pandemic caused
per capita income. Likewise, studies suggest that a stable institutional disruptions especially in labour-intensive industries. Preliminary
framework, higher human capital but also a higher openness to trade
data shows that EU imports of wood products, fish, hides and
facilitate the diversification of the product base. 17
skins, leather articles, but also transportation equipment from
The mid-term evaluation of the EU GSP suggested that the degree GSP beneficiary countries substantially declined in 2020.
of export diversification at product level (measured by the number
of tariff lines for which exports to the EU takes place) has been Trade can be an important driver for economic recovery of the
highest for beneficiaries of the standard GSP but is also noticeable GSP beneficiary countries as it contributes to the generation
for EBA beneficiaries. Still, EBA beneficiaries continue to have the least of additional income and job opportunities. In this context, the
diversified export portfolios, both on the product and sectoral level. GSP can play a vital role with its comprehensive approach to
However, according to the study in support of the impact assessment trade and development, also considering the social challenges
of the GSP review, the EBA contributes the most to export diversification exposed by the pandemic.
in beneficiaries.18

With regards to short-term trends at sectoral level, 29 beneficiaries

recorded some increase of diversification at sectoral level between Change in traded product sections between 2017 and 2019
2017 and 2019, measured by the number of product sections with
exports to the EU. For seven countries this increase was substantial,
including more than two product sections. These include EBA
countries (e.g. Benin, Rwanda, Cambodia) but also GSP+ beneficiaries
like Armenia, Mongolia, Uzbekistan19 and the Kyrgyz Republic. On the
other hand, 24 beneficiaries experienced a decline in product sections
traded under the GSP between 2017 and 2019. For four beneficiaries-
Burkina Faso, Democratic Republic of Congo, Uganda, and Congo- this
decline was rather considerable and included more than four product
sections. This negative trend can be partly explained by ongoing
conflicts in a number of these beneficiary countries.

To further increase the positive effects of the GSP on export

diversification in beneficiary countries, the study in support of the Change in traded product sections
impact assessment of the GSP review recommends broadening the -10 -2 6
standard GSP to include a wider variety of product sections, along
with a revised product graduation system.20

17 See for example Agosin, M., Alvarez, R., & Bravo-Ortega, C. (2012). Determinants of export diversification around the world: 1962–2000. The World
Economy. Online available from https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-9701.2011.01395.x, or:
Elhiraika, A., Mbate, M. (2014). Assessing the Determinants of Export Diversification in Africa. Applied Econometrics and International Development. Vol.
14(1), pages 147-160. Online available from http://www.usc.es/economet/reviews/aeid14111.pdf
18 Study in support of an impact assessment to prepare the review of the GSP Regulation No 978/2021, p. 65, https://trade.ec.europa.eu/doclib/docs/2021/july/
tradoc_159714.pdf
19 As of 10th April 2021, Uzbekistan is part of the GSP+.
20 Study in support of an impact assessment to prepare the review of the GSP Regulation No 978/2021, p. 61, https://trade.ec.europa.eu/doclib/docs/2021/july/
tradoc_159714.pdf
 14 GSP INSIGHTS

MONITORING THE GSP At the same time, the GSP relates to broader sustainability and
environmental protection initiatives. The European Green Deal has
positioned sustainability and the green economy as one of the major
In addition to the economic aspects, the GSP includes a significant policy priorities of the EU. This is also reflected in the GSP regulation
values dimension, promoting human and labour rights, environmental as more than a quarter of the international conventions enshrined
protection, and good governance in beneficiary countries. This in the GSP address environmental protection, also in line with the
is most prominent within the GSP+ arrangement, which provides UN SDGs. The recent EU Trade Policy Review further strengthens
deeper engagement with those beneficiaries that demonstrate the this connection, with the aim of maximising the contribution of
effective implementation of the 27 core international conventions. trade policy to addressing key global challenges such as climate
Through this framework, the EU can support not only economic but change and sustainable development.
also values- related development in beneficiary countries.

THE MONITORING PROCESS AND GSP HIGHLIGHTS

SOME EXAMPLES ON THE PROGRESS ON
The EU has put in place a detailed monitoring process to
track beneficiary countries’ effective implementation of the ERADICATING CHILD LABOUR 2018-2019
27 international conventions on human rights, labour rights,
✓ Sri Lanka committed to fully eliminating child labour by
environmental protection, and good governance. This monitoring
2022. In part through the new ‘Child Labour Free Zones’,
includes exchanges of information, dialogue, and visits and involves
the country was able to reduce child labour to 1%.
a diversity of stakeholders, including civil society, trade unions,
business associations and others. Every two years, the European ✓ In Bolivia, the minimum working age was raised to 14
Commission publishes a report on the implementation of the GSP years, corresponding to the internationally accepted
detailing the progress made by the GSP+ beneficiary countries in standard.
implementing the 27 international conventions. These reports take
into account the findings of EU monitoring missions, EU engagement ✓ Mongolia agreed to conduct a child labour survey
with partner countries (including human rights dialogues), and following a recent GSP+ monitoring mission.
reports from international organisations, international monitoring
bodies, civil society, and industry.

The latest, third biennial report, along with a dedicated civil society
dialogue and covering the 2018-2019 period, showed that the
PROGRESS ON ENVIRONMENT AND
GSP is delivering not only in terms of economic development but CLIMATE CHANGE 2018-2019
also the implementation of the core conventions in beneficiary
countries. The third biennial report was accompanied by dedicated ✓ All GSP+ beneficiaries signed the Paris Agreement
staff working documents on the eight GSP+ beneficiary countries and the Kigali Amendment to the Montreal Protocol.
and a document focussing more particularly on the EBA Enhanced ✓ Beneficiary countries improved reporting on various
Engagement partners. During the 2018-2019 reporting period, multilateral environmental agreements, for example
the European Commission and the European External Action the Convention on International Trade in Endangered
Service (EEAS) conducted monitoring missions in Armenia, Bolivia, Species of Wild Fauna and Flora (CITES).
Kyrgyzstan, Mongolia, Pakistan, the Philippines, and Sri Lanka,
as well as Cambodia, Bangladesh, and Myanmar. These case ✓ In accordance with the Convention on Biological
studies showed, through concrete examples, the improvements Diversity, stronger targets and review mechanisms are
that the GSP has brought in these countries complying with the expected to be set on beneficiary countries’ progress
relevant conventions and further aligning with the UN Sustainable for the post-2020 global framework on biodiversity.
Development Goals (SDGs).
 GSP INSIGHTS 15

The two-year GSP+ Monitoring Cycle

The two-year GSP+ Monitoring Cycle

UN and ILO Civil Society and Business Members of

Council
monitoring reports Social Partners Stakeholders European Parliament

European Commission and EEAS

written response Letter exchanges GSP+ Dialogue

involves and
High-level meetings complements
Salient Issues existing bilateral
Follow-up questions
-identified biennially considering the progress and GSP+ beneficiary country human rights
Workshops dialogues,
shortcomings of beneficiary countries related to
the effective implementation of included comprises of
conventions monitoring missions
-not public as the aim is to facilitate dialogue and
build trust with beneficiary country authorities

Members of
European
Monitoring priorities Parliament
(public) YEAR 1 Council Working
Party on the GSP
GSP+ Monitoring
Missions Civil Society
Organisations
European Parliament -EC aims to visit
Biennial
GSP+ Reports each GSP+ National and local
Council
(public)
YEAR 2 beneficiary country
at least once during
authorities

each two-year cycle local offices of

International
Organisations
utilised by a variety of
stakeholders, including
local Civil Society
public authorities and
Organisations
civil society
GSP+ beneficiary country

European Commission and EEAS

UN and ILO Civil Society and Business Members of

Council
monitoring reports Social Partners Stakeholders European Parliament

THE GSP+ MONITORING PROCESS IN DETAIL Every two-year monitoring cycle, the Commission and the EEAS
prepare salient issues, which contain an overview of the progress
In order to assess a beneficiary country’s implementation of an made by the country as well as salient shortcomings in effective
international convention under the GSP+ arrangement, the European implementation and recommendations in how the country in question
Commission (including for example DG TRADE, DG EMPL, DG INTPA, can implement the 27 conventions more effectively. Reports by
DG ENV, DG CLIMA, DG HOME, and EEAS) draws on conclusions and monitoring bodies of the relevant conventions form the basis of the
recommendations made by monitoring bodies as set out in the salient issues along with the with the Commission’s own conclusions
conventions included in the GSP+ arrangement. With regards to on beneficiary countries’ compliance gained from internal and
the labour rights conventions for example, the relevant institutions external consultations. The Commission expects the beneficiary
are the ILO including its Committee of Experts on the Application of countries to issue a written response. The country’s progress will be
Conventions and Recommendations (CEACR) and the Committee on evaluated in further communication, the monitoring visit, and finally
the Application of Standards (CAS). Under the GSP+, the beneficiary in the biennial GSP report.
country shall cooperate in the monitoring process by providing all
the information necessary to determine whether it is effectively GSP+ monitoring missions form another key part of the GSP+
implementing the conventions covered by the GSP+. Stakeholders dialogue. They consist of field visits, workshops, high-level meetings
are actively engaged throughout the process through civil society between the European Commission, including EEAS officials and
discussions and formal civil society dialogues in Brussels, as well as beneficiary country authorities and other stakeholders. The missions
dedicated meetings with local stakeholders during and in preparation build on already existing bilateral fora between the EU and beneficiary
of monitoring visits. The Commission consults stakeholders such countries, and connect authorities on national and local levels, along
as civil society, social partners, the European Parliament, and the with business and civil society representatives, and local offices of
Council for the preparation of the biennial reports. Input also comes international organisations. One of the critical components of this
from human rights defenders, trade unions, and local offices of dialogue is the engagement of local business stakeholders. As they
international organisations, which is crucial to assess the progress benefit directly from tariff preferences provided by the GSP+, the
made by a GSP+ beneficiary country. European Commission expects that local stakeholders also provide
 16 GSP INSIGHTS

support to their respective governments in fulfilling the scheme’s

requirements and implementing the standards in practice. THE EU SUPPORTS THE SUSTAINABLE
In case the European Commission and EEAS determine that a specific
DEVELOPMENT OF GSP+ BENEFICIARY
beneficiary country is no longer meeting the GSP+ requirements, it COUNTRIES
can fully or partially suspend the GSP+ preferences for that country.
Such cases might include a monitoring body of a relevant convention ✓ The EU along with the ILO support Sri Lanka in protecting
identifying a serious failure to effectively implement the convention no migrant workers from falling victim of forced labour
longer cooperating with reporting procedures and monitoring bodies, including within the framework of the National Action Plan
or the country having formulated a reservation for a convention that for the Protection and Promotion of Human Rights.
is incompatible with the convention’s object and purpose. The decision ✓ The ILO supports Pakistan in the enactment of the
to temporarily withdraw GSP+ preferences must be re-evaluated Balochistan Elimination of Bonded Labour Bill, 2020, and
every six months. Third parties, including civil society, the Council, or the Rehabilitation of Victims of Bonded Labour Bill, 2020,
the European Parliament can also provide input in the withdrawal respecting labour rights enshrined in the conventions linked
procedure through questions and replies. to the GSP+.

✓ The National Child Labour Committee of the Philippines

targets one million children to be withdrawn from child
REASONS TO TEMPORARILY WITHDRAW labour by 2025 in the framework of the Philippine Program
PREFERENCES Against Child Labour.

✓ Serious and systematic violation of core human and labour ✓ In accordance with international labour standards and the
rights conventions GSP+, Sri Lanka is set to raise the minimum age required for
employment from 14 to 16 years. In addition, the National
✓ Export goods are made by prison labour Action Plan for the Protection and Promotion of Human
Rights 2017–21 intends to eliminate all hazardous forms
✓ Serious shortcomings in customs controls with regard to of child labour.
the export or transit of drugs
✓ Support given to the association of local governments in
✓ Failure to comply with international conventions on Bolivia in setting up an observatory of political harassment
antiterrorism and money laundering and violence.
✓ Serious and systematic unfair trading practices ✓ Opinion survey in 2019 among Kyrgyz citizens regarding
their perception of human rights and the GSP+, in the
✓ Serious and systematic infringements of the objectives framework of the Promoting Human and Labour Rights
adopted by regional fishery organisations or any under GSP+ project.
international arrangements to which the EU is party
✓ Enhancing the socio-economic rights of women working in
✓ Fraud, irregularities, or systematic failure to comply with or agriculture in the Punjab in the framework of the INSPIRED+
to ensure compliance with the rules concerning the origin of Pakistan project.
the products and with the related procedures
✓ Support to value chains of Sri Lanka’s food and spice sector
✓ GSP+ benefits can be temporarily withdrawn from GSP+ as well as business outsourcing. Establishment of the
beneficiaries in case the country does not respect in practice National Export Strategy in 2018.
the undertakings it is committed to under the conventions
linked to the GSP+ ✓ Providing budget support to the efforts in strengthening
labour standards in Mongolia, including a child labour
survey and a progress indicator related to ILO Conventions.

PARTNERSHIPS AND THE EU’S FURTHER SUPPORT ✓ Supporting Armenian regional civil society organisations
in the framework of the Eurasia Partnership Foundation
The GSP is more than a trade tool: the dialogue with the EU on in producing evidence-based reports to complement UN
effective implementation of international conventions supports the reports.
longer-term sustainable development of the countries concerned.
The EU is also providing financing for partners to help implement ✓ The creation of the first Domestic Workers Association
the covered conventions and take more advantage of the benefits. in Cabo Verde, supported by a campaign focusing on
the formalisation and regulation of domestic work. In
addition, the Government is in the process of developing,
in collaboration with the ILO, a National Strategy for 2017–
20 to encourage the transition from informal to formal
employment, which will be especially important for women.
 GSP INSIGHTS 17

CHALLENGES AHEAD ENGAGEMENT WITH THE GSP

Despite significant developments in beneficiary countries relating to EU-based civil society organisations are encouraged to engage with the
values, challenges remain. The EU has identified concerns in several GSP through regular Civil Society Dialogues organised by the European
areas:21 Commission. These dialogues provide a platform for European civil
society and their respective contacts in beneficiary countries to directly
o Civil society space including media freedom is shrinking, contribute to the monitoring of the GSP and particularly the GSP+, and
notably in Pakistan and the Philippines. In Pakistan, a number to provide input to the European Commission on whether commitments
of international NGOs are being expelled, with implications set out under the international conventions linked to the GSP+ are
also for the freedom of those NGOs still active in the country. being respected in beneficiary countries..
Regarding the Philippines, there is serious concern from the
side of the European Commission about the death toll linked In addition to European civil society, stakeholders from beneficiary
to the campaign against illegal drugs and the lack of effective, countries are also regularly consulted in preparation of and during
impartial, and transparent investigations of all cases of death; GSP+ monitoring missions. Insights gathered from beneficiary
and the impunity related to the killing, harassment, and attacks country stakeholders form an integral part of reports prepared
against media personnel. However, there are numerous positive in the framework of monitoring missions and contribute to the
examples as well. For instance, Armenia displayed notable assessment of the European Commission of the compliance of
improvements in freedom of expression and assembly during beneficiary countries with the standards set out in the conventions.
the ‘Velvet Revolution’ of 2018.
To further enhance visibility, transparency, and engagement with the
o Death penalty and the calls for its reintroduction in various EU’s GSP, the GSP Hub Project was launched in 2020. The website
beneficiary countries are deemed worrisome by the European gathers comprehensive information on the beneficiary countries,
Commission. Most concerning is a renewed call for a vote including detailed country profiles and monitoring priorities. The
on a bill on the death penalty in the Philippines. In Sri Lanka, website also includes information on the international conventions
statements to the effect that executions would be resumed covered by the GSP+ as well as a reporting database, facilitating the
are a cause for concern for the EU. Still, during a recent GSP+ access to the relevant country reports. Stakeholders from both the EU
mission, government officials in Sri Lanka were confident that the
and beneficiary country can use conversation tools to leave comments
de facto moratorium would stand. On the other hand, Mongolia’s
and observations on beneficiary countries or the GSP+ conventions.
own assessment concluded that the re-introduction of the death
penalty would be incompatible with its international obligations. Moreover, stakeholders in the EU can share their notes and observations
Pakistan is debating whether to reduce the number of crimes that regarding the GSP through the Single Entry Point (SEP). Using the
carry the death penalty. It has meanwhile reduced the number of form, all natural persons who are citizens or permanent residents of
executions and reformed the procedure for mercy petitions. the EU, legal persons registered in the EU (for example EU companies,
trade organisations, or non-governmental organisations), and Member
o Labour rights are a fundamental part of the GSP+,
State authorities can submit complaints on barriers to trade in non-EU
with beneficiaries required to sign eight fundamental ILO
countries, and about non-EU countries not meeting the commitments
conventions. However, the European Commission’s concerns
about freedom of association remain in Sri Lanka, Pakistan, they have made in trade agreements and the GSP. As the GSP is
Bangladesh, and Myanmar. There are also signs of progress one of the EU’s key trade and sustainable development instruments,
in the area of labour rights in certain beneficiary countries: stakeholders, including civil society are encouraged to use the SEP
Sri Lanka has introduced ‘Child Labour Free Zones’ and is to report non-compliance with commitments taken by beneficiary
committed to fully eliminate child labour by 2022. countries in implementing the key international conventions as part of
the GSP arrangement.
Through enhanced engagement, the EU intensified the dialogue with
three EBA beneficiaries – Bangladesh, Cambodia, and Myanmar – to The SEP is managed by the European Commission’s Chief Trade
press for concrete actions on and sustainable solutions to serious Enforcement Officer (CTEO). The CTEO is responsible for strengthening
shortcomings in respecting fundamental human and labour rights. the implementation of the EU’s multilateral, regional and bilateral trade
agreements, and ensuring that countries the EU has trade agreements
with meet the commitments they make under them.

21 Report on the Generalised Scheme of Preferences covering the period 2018-2019: https://trade.ec.europa.eu/doclib/docs/2018/january/tradoc_156536.pdf
 18 GSP INSIGHTS

WAYS FORWARD
The GSP complements a number of initiatives, projects, and • Product coverage and graduation
efforts of actors in beneficiary countries, the EU, and international • Beneficiaries and arrangements
organisations to support progress in the fields of economic • Conventions
growth, adherence to international values and standards, and the • Monitoring
achievement of SDGs. Through this, the GSP makes an important • Country graduation
contribution in alleviating poverty and supporting sustainable • GSP conditionalities and preference withdrawal
development in beneficiary countries. • Safeguards
Periodic Review The pre-final report already comprises a number of recommendations,
including for example:
As this publication emphasises, the current GSP regulation
delivers with regards to the core objectives of the arrangement. • Facilitate the transition from EBA to GSP and GSP+ after
Nonetheless, the current GSP regulation expires in December 2023 LDC graduation
and its review process is ongoing. Considering the substantial and • Expand list of conventions covered under the GSP+ and
successful reform of the GSP in 2014, it can be expected that the replace the Kyoto Protocol with the 2015 Paris Agreement
main features of the current GSP will also be adopted in the new • Expand both negative and positive conditionality
regulation. This is also reflected in the public consultation carried out • Further enhance transparency of the monitoring and
for the review of the GSP regulation. The majority of stakeholders facilitate involvement for civil society
favour a continuation of the three arrangements, EBA, standard • Better involve local actors in future withdrawal processes
GSP, and GSP+.
The pre-final report finds no compelling reasons to introduce
The study on the review of the GSP explores eight avenues to changes to the structure or product coverage of the arrangement.
connect the future GSP regulation even closer to the fundamental
objectives of the arrangement:

Timeline
Summer 2021 EC aims to publish 31 December 2023
new regulation

Study on the Current GSP

Review of the GSP
December 2022 regulation expires
Regulation
GSP INSIGHTS
Insights on the EU’s
Generalised Scheme
of Preferences

Prepared by:

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Disclaimer: The information and views set out in this document are those of the author(s) and do not necessarily reflect the official
opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this document. Neither the
Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the
information contained therein.
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Last updated July 2021