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Generalised
System of Preferences (GSP) 2009-2011
European Union agrees to
maintain Trade Preferences for Developing Countries
The European Union has adopted a new Regulation applying the Generalised
System of Preferences (GSP) for the period from 1 January 2009 until the end
of 2011. This decision will allow the EU to maintain preferential access
to its market for 176 developing countries. The renewed preference
system will be updated and improved, ensuring that GSP is targeted at those
countries that need it most. GSP provides real economic value to
developing countries, with Euro 57 billion worth of trade under the scheme in
2007.
EU Trade Commissioner Peter Mandelson said: "The continuation of GSP will
ensure stability and predictability for beneficiaries and traders in the EU
and developing countries. GSP is a vital tool of our pro-development EU trade
policy."
As a result of re-calculations to reflect the evolution of trade, preferences
for specific product groups will be re-established for six beneficiary
countries of GSP (Algeria, India, Indonesia, Russia, South Africa and
Thailand). Preferences will be suspended for one country, Vietnam, for
Section XII products (footwear and some other products). These
adjustments are triggered automatically when a country's performance on the EU
market goes above or below a certain threshold. This procedure follows
strict rules, and helps to ensure that the benefits of GSP preferences are
targeted at the countries that need them most. Suspension of
preferences, called "graduation", reflects the fact that a
particular country is competitive in the EU market for the products in
question.
For India this review is very good news as the Gems and Jewellery sector
(Section XIV) will benefit again from the tariff preferences offered by the
GSP. In 2007, India's exports to EU, of jewellery, pearls, precious and
semi-precious stones and metals were worth 2.1 billion euros. India is
the largest beneficiary of EU's GSP scheme. In 2007, preferential
imports entering into EU from India under the GSP reached 11.3 billion euros
as compared to 9.6 billion euros in 2006.
Background
The GSP is an autonomous trade arrangement through which the EU provides
non-reciprocal preferential access to the EU market to 176 developing
countries and territories. In 2007, developing countries exported Euro
57 billion worth of goods under GSP, with a nominal duty loss for the EU of
Euro 2.5 billion. At present, 14 beneficiary countries receive the
additional preferences offered under the GSP+ incentive arrangement.
These preferences will lapse at the end of the year and both existing and
potential new beneficiaries meeting the applicable criteria will need to apply
before 31 October 2008 if they wish to receive GSP+ treatment from January
2009. A special arrangement for the 50 least-developed countries (LDCs),
known as the "Everything But Arms" (EBA) initiative, provides the
most favourable treatment of all, granting the LDCs "duty-free and
quota-free" access to the EU market.
For
more information: www.ec.europa.eu/trade
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