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EU GSP regime: what next?

The European Commission has launched a consultation to help shape the next Generalised Scheme of Preferences ("GSP") from 2024. Stakeholders have until 3 June 2020 to comment.

 

Introduction

On 11 March 2020, the European Commission launched a public consultation on the European Union ("EU")'s Generalised Scheme of Preferences ("GSP").1 The GSP regime allows products originating in developing countries (as classified by the World Bank) to enjoy tariff preferences for import into the EU. Currently, 71 countries enjoy preferences.2

The EU's current GSP regime3 expires end 2023, and preparations for its replacement are underway. With this consultation, the Commission is seeking input from stakeholders by 3 June 2020.

The consultation, in the form of an online questionnaire, focuses on features of the current regime, but also allows for submission of written observations going beyond responses to the questions.

 

Key questions

Input is sought on matters including:

  • Structure - Is the structure of three separate GSP regimes (standard GSP scheme, GSP+, and "Everything But Arms" (EBA)) working, or should it be changed?
  • GSP+ - Should the GSP+ regime (rewarding countries that ratify and implement certain international conventions on human rights and labour rights) be expanded to require compliance with additional international conventions?
  • Withdrawal of benefits - Should it also be possible to withdraw GSP benefits in case of violations of certain international conventions related to environment protection (including on climate change) or good governance?
  • GSP beneficiary countries - Should the list of GSP beneficiary countries be reduced to focus even more on those countries most in need?
  • Product scope - Should the product scope of the GSP be widened or narrowed?Product graduation - Should the "product graduation" mechanism4 for the standard GSP scheme be amended to apply to individual products as opposed to broad product categories? Should this mechanism also apply to the GSP+ and EBA regimes?
  • Country graduation - Should a different transition period be foreseen in the case of "country graduation"?5

 

Next steps

For now, the existing GSP regime remains in full effect, and continues as before.

Once the consultation is over and the Commission's intentions are embodied in a formal proposal, the EU Council and European Parliament will co-decide the next regime. The politics can be expected to be intense.

 

1 See here.
2 See here for a summary with key features and statistics on the EU’s GSP (February 2020).
3 See Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences; latest consolidated version available here.
4 Under this mechanism, preferences for certain product categories originating in certain beneficiary countries are removed when imports of those countries have reached a certain level.
5 Under this mechanism, a country that is no longer classified by the World Bank as a least developed country in three consecutive years loses its status as GSP beneficiary country after a transition period of three years.

 

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