Highlights of the EU's new

Generalised Scheme of Preferences

(GSP)

This presentation is part of the Commission's Info Pack on the

EU's new GSP and is best read together with the description in
full text of the Info Pack.
This is not a legal document and has been prepared
exclusively for information purposes. This should not be used
by any party as a basis for any decisions with legal
implications. The exclusive legal basis for the new GSP is
Regulation (EU) No 978/2012 of the European Parliament and
of the Council.

TIMELINE

Current scheme: Preferences applicable until 31 December

2013 (Council Regulation (EC) No 732/2008 rolled over by
Council Regulation (EC) No 512/2011).

New scheme: Basic rules published on 31 October 2012.

New preferences to apply from 1 January 2014.

MAIN OBJECTIVES of NEW GSP

1. Focus the preferences on those most in needLeast Developed
Countries and other poor economies with no other preferential channels to
access the EU market. Reflection of different trade, financial and
development needs of countries.
2. Enhance GSP+ as a tool to support partners which are serious about
implementing international conventions.
3. Make the system more transparent and predictable for economic
operators.
4. Adapt to Lisbon proceduresenhanced role for the European Parliament.

Focus on partners most in need

Current
177 countries and overseas territories, divided in 3 groups:
- 'Standard' GSP (generous preferences)
- GSP+ (enhanced preferences because countries ratify and
implement international conventions relating to human and labour
rights, environment and good governance)
- Everything But Arms (EBA, duty-free quota-free access for all
goods except arms to least developed countries)
Fact: more advanced economies place a lot of competitive
pressure on LDC and other poorer country competitorswhich lag
behind. Preferences must be re-focused to help those most in
need.

Focus on partners most in need

New
90 countries which need GSP trade preferences the most:
- 49 least developed countries under EBA
- 41 Low income' and 'lower middle income' countries, as classified by the
World Bank. These countries may benefit from standard GSP and/or GSP+
(see below)
Partners which are no longer eligible: 33 Overseas countries and territories
(already have accessdo not need GSP)
Partners which no longer benefit:
- 34 Partners which have been granted preferences through other tracks
(e.g. bilateral agreements, autonomous arrangementsdo not need GSP).
- 20 'High income' or 'upper middle income' partners, as listed by the World
Bank (these more advanced developing countries no longer need
preferences to export; in fact, continuing to provide preferences to them
increases the competitive pressure on exports from LDCs and other poor
countries, which lag behind. This is particularly damaging for these
countries, in a context of increased competition due to the general drop in
EU tariffs.)

Focus on partners most in need (continued)

Everything-but-Arms (EBA) beneficiaries

Africa (34): Angola, Burkina Faso, Burundi, Benin, Chad, Democratic Republic
of Congo, Central African (Republic), Djibouti, Eritrea, Ethiopia, Gambia,
Guinea, Equatorial Guinea, Guinea-Bissau, Comoros Islands, Liberia, Lesotho,
Madagascar, Mali, Mauritania, Malawi, Mozambique, Niger, Rwanda, Sudan,
Sierra Leone, Senegal, Somalia, South Sudan, Sao Tome and Principe, Togo,
Tanzania, Uganda, Zambia.
Asia

(9):

Afghanistan,

Bangladesh,

Bhutan,

Cambodia,

Lao

(People's

Democratic Republic), Myanmar/Burma, Nepal, Timor-Leste, Yemen.

Austrialia and Pacific (5): Kiribati, Samoa, Solomon Islands, Tuvalu,
Vanuatu.
Caribbean (1): Haiti
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Focus on partners most in need (continued)

Standard GSP beneficiaries

Armenia, Azerbaijan*, Bolivia, China, Cape Verde, Colombia, Republic of Congo,

Cook Islands, Costa Rica, Ecuador, Georgia, Guatemala, Honduras, India,
Indonesia, Iran*, Iraq, Kyrgyzstan, Maldives**, Marshall (islands), Micronesia
(federate States of), Mongolia, Nauru, Nicaragua, Nigeria, Niue, Pakistan,
Panama, Paraguay, Peru, the Philippines, El Salvador, Sri Lanka, Syria,
Tajikistan, Thailand, Tonga, Turkmenistan, Ukraine, Uzbekistan, Vietnam.

In July 2012 both Azerbaijan and Iran were classified as upper-middle income countries for the third
time. Therefore, preferences will be deferred for these countries. This was announced in a Commission
delegated regulation published on 21 February 2012. Preferences will no longer apply as of one year
later, providing an ample transition period for operators to adjust.

** Maldives were graduated out of the LDC status at the end of 2010 and as such will have exited the EBA
arrangement after a 3-year transition period on 31 December 2013.

Focus on partners most in need (continued)

GSP+ beneficiaries
The list of GSP+ countries in the new law is originally empty. This is because
countries which meet the criteria will be entered into GSP+ as they apply.
The new GSP+ law expands the number of eligible countries (see the slides on
GSP+ below).
All eligible countries interested in GSP+ under the new law (including those
which enjoyed GSP+ under the preceding law) must apply under the new
rules to obtain GSP+.
Eligible countries have more than one year to apply and obtain GSP+ before
the new preferences enter into force on 1 January 2014, but early
application is advisable.

Focus on partners most in need (continued)

Which partners are no longer eligible?

33 Overseas Countries and Territories (OCTs) which have
already a special market access arrangement to the EU or belong
to developed countries:
Anguilla, Netherlands Antilles, Antarctica, American Samoa, Aruba, Bermuda, Bouvet
Island, Cocos Islands, Christmas Islands, Falkland Islands, Gibraltar, Greenland,
South Georgia and South Sandwich Islands, Guam, Heard Island and McDonald
Islands, British Indian Ocean Territory, Cayman Islands, Northern Mariana Islands,
Montserrat, New Caledonia, Norfolk Island, French Polynesia, St Pierre and Miquelon,
Pitcairn, Saint Helena, Turks and Caicos Islands, French Southern Territories,
Tokelau, United States Minor Outlying Islands, Virgin Islands British, Virgin IslandsUS, Wallis and Futuna, Mayotte.
As these partners have alternative market access arrangements, no negative impact
expected.
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Focus on partners most in need (continued)

Which partners no longer benefit?

34 Partners with another market access arrangement:
Euromed (6): Algeria, Egypt, Jordan, Lebanon, Morocco, Tunisia.
Cariforum (14): Belize, St. Kitts and Nevis, Bahamas, Dominican
Republic, Antigua and Barbuda, Dominica, Jamaica, Saint Lucia, SaintVincent and the Grenadines, Barbados, Trinidad and Tobago, Grenada,
Guyana, Surinam.
Economic Partnership Agreement Market Access Regulation (8): Cte
d'Ivoire, Ghana, Cameroon, Kenya, Namibia, Botswana, Swaziland, Fiji.
Eastern and Southern Africa (3): Seychelles, Mauritius, Zimbabwe
Pacific (1): Papua New Guinea
Other (2): Mexico, South Africa.
As these partners have alternative market access arrangements, no
negative impact expected.

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Focus on partners most in need (continued)

Which partners no longer benefit?

8 High income countries and territories (according to World Bank):
Saudi Arabia, Kuwait, Bahrain, Qatar, United Arab Emirates, Oman, Brunei
Darussalam, Macao.
12 Upper middle income countries (UMIs)*: Latin America (5):
Argentina, Brazil, Cuba, Uruguay, Venezuela; ex-USSR (3): Belarus, Russia
, Kazakhstan; other (4): Gabon, Libya, Malaysia, Palau
Limited drops in exports (1% range) for some of these partners. Even
marginal drops in exports by the more advanced, bigger economies, can
potentially provide significant opportunities for the poorest, whose exports
are very small in comparison. To give an idea of the order or magnitude, a
drop of 1% in, say, Brazilian exports, is equivalent to more than 16 times
Burkina Faso's total exports to the EU.
*

12

In July 2012 both Azerbaijan and Iran were classified as upper-middle income countries for the
third time. Therefore, preferences will be deferred for these countries. This was announced in a
Commission delegated regulation published on 21 February 2013. Preferences will no longer apply
as of one year later, providing an ample transition period for operators to adjust.

Focus on partners most in need (continued)

New "dynamic" approach

Once the new GSP enters into force, status of countries is revised
continuously. When a country no longer fulfils criteria to be a beneficiary,
the partner exits the beneficiary list with ample transition periods to
ensure economic operators can adapt. Two cases:
World Bank lists the country as "high-income" or "upper middle income
three years in a row. At the beginning of the following year, the country
is no longer beneficiary of GSP and a transition period of one year is
granted for the economic operators to adapt.
if a preferential market access arrangement (typically, a bilateral free
trade agreement) is applied (even on a provisional basis), a transition
period of two years is granted.

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Focus on products most in need: graduation of sections

Current
Based on import share in 21 product sections (largely based on the EU's customs
categories)
Preferences are not applied if threshold of 15% of total imports by all GSP beneficiaries
is reached
Lower threshold of 12.5% for textiles
Graduation applies to standard GSP and GSP+
New
Product sections further split up to improve coherence of product classification
Thresholds increased to 17.5% (general) and to 14.5% (textiles) to better identify
competitive sectors and to neutralize 'over graduation effect' due to decrease in the
number of beneficiaries.
Graduation only applies to standard GSP
List of graduated sectors for the period from 1 January 2014 to 31 December
2016 has been adopted by the Commission on 17 December 2012.

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Graduated sectors (period 2014 2016)

China: (6 newly graduated sectors): S-1a: live animals and animal products
excluded fish; S-1b: fish, crustaceans, mollusc and aquatic invertebrates; S-2b:
vegetables and fruits; S-2c: coffee, tea, mat and spices; S-2d: cereals, flour, nuts,
resins and plaiting; S-4b: prepared foosdtuffs (excl. meat and fish), beverages,
spirits and vinegar.
27 graduated sectors in total.
The only sectors that are not graduated are:
S-2a: vegetable products
S-3: animal or vegetable oils, fats and waxes
S-4a: meat products
S-4c: tobacco
S-5: mineral products
India: (5 newly graduated sectors): S-5: mineral products; S-6a: inorganic and
organic chemicals; S-6b: chemicals, other than organic and inorganic chemicals; S8a: raw hides and skins and leather; S-17b: road vehicles, bicycles, aviation and
space, boats and parts thereof. S-11a: textiles, remains graduated.
Indonesia: (2 newly graduated sectors): S-1a: live animals and animal products
excluded fish; S-6b: chemicals, other than organic and inorganic chemicals; S-3:
animal or vegetable oils, fats and waxes remains graduated.

Graduated sectors (period 2014 2016) - continued

Thailand (2 newly graduated sectors): S-4a: preparations of meat and fish; S4b: prepared foosdtuffs (excl. meat and fish), beverages, spirits and vinegar; S14: Pearls and precious metals is still graduated.
Ecuador (2 newly graduated sectors): S-2a: vegetable products; S-4a:
preparations of meat and fish.
Ukraine (1 newly graduated sector): S-17a: railway and tramway vehicles and
products.
Nigeria (1 newly graduated sector): S-8a: raw hides and skins and leather.
Costa Rica (1 newly graduated sector): S-2b: vegetables and fruits.
For Vietnam, sectors 12a (footwear) and 12b (headgear, umbrellas etc. ) are no
longer graduated

NB: if a country is granted GSP+, the graduation does not occur

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Focus on need: more products under preferences, larger

preferences for some products
Current

Standard GSP: just under 66% of tariff lines covered (either

tariff reduction or zero tariffs)
Products split between 'sensitive' and 'non-sensitive
- Sensitive: tariff reductions
- Non-sensitive: duty-free

GSP+: just over 66% of tariff lines covered (zero tariffs)

Both sensitive and non-sensitive products duty-free

Everything But Arms: 99.8% of tariff lines covered (zero tariffs)

All products duty-free (except arms)

To note: 25% of tariff lines are subject to 0% duty. When added to the 66% tariff lines covered by GSP
or GSP+, this implies that only 9% of lines carry normal duty for GSP and GSP+ beneficiaries
underlining generosity of the scheme.

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Focus on need: more products under preferences,

larger preferences for some products (continued)

New

GSP: 15 more tariff lines (6-digit) under the scheme, 4

tariffs lines (8-digit) see preference expand (they move
from sensitive to non-sensitive).
GSP+: 4 more tariff lines (6-digit) under the scheme.
Products carefully selected to avoid that more advanced
beneficiaries
put
additional
pressure
on
poorer
beneficiaries.

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Focus on need: more products under preferences,

larger preferences for some products (continued)
New
GSP: 15 more 6-digit tariff lines all non-sensitive
CN code
280519
280530
281820
310221
310240
310250
310260
320120
780199
810194
810411
810419
810720
810820
810830

19

Description
Alkali/alkaline-earth metals other than sodium & calcium
Rare-earth metals, scandium & yttrium, whether/not intermixed/interalloyed
Aluminium oxide (excl. artificial corundum)
Ammonium sulphate
Mixtures of ammonium nitrate with calcium carbonate/other inorganic nonfertilising substance
Sodium nitrate
Double salts & mixtures of calcium nitrate & ammonium nitrate
Wattle extract
Unwrought lead other than refined, n.e.s. in 78.01
Unwrought tungsten (wolfram), incl. bars & rods obt. simply by sintering
Unwrought magnesium, containing at least 99.8% by weight of magnesium
Unwrought magnesium (excl. of 8104.11)
Unwrought cadmium; powders
Unwrought titanium; powders
Titanium waste & scrap

Focus on need: more products under preferences,

larger preferences for some products (continued)
New
GSP: 4 8-digit tariff lines go from sensitive to non-sensitive
CN code
06031200
24011060
39076020

85219000

Fresh Cut Carnations And Buds, Of A Kind Suitable For Bouquets Or For
Ornamental Purposes
Sun-Cured Oriental Type Tobacco, Unstemmed Or Unstripped
Poly "Ethylene Terephthalate", In Primary Forms, Having A Viscosity
Number Of >= 78 Ml/G")
Video Recording Or Reproducing Apparatus (Excl. Magnetic TapeType);Video Recording Or Reproducing Apparatus, Whether Or Not
Incorporating A Video Tuner (Excl. Magnetic Tape-Type And Video
Camera Recorders)

GSP+: 4 6-digit new tariff lines

CN code
280519
280530
281820
780199

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Description

Description
Alkali/alkaline-earth metals other than sodium & calcium
Rare-earth metals, scandium & yttrium, whether/not intermixed/interalloyed
Aluminium oxide (excl. artificial corundum)
Unwrought lead other than refined, n.e.s. in 78.01

Enhanced GSP+:
More incentives to join, more countries eligible
Current
Graduation applies to GSP+
Entry
- Vulnerability import share criterion: country only eligible if it represents
less than 1% of imports by all GSP beneficiaries in product section
- Vulnerability non-diversification criterion: 5 largest product sections
must cover at least 75% of total exports from country to EU
- Entry window: every 1.5 years

New
Graduation no longer applies to GSP+
Entry
- Vulnerability import share criterion: threshold increases from 1% to
2%
- Vulnerability non-diversification criterion: number of sectors to cover at
least 75% increases from 5 to 7 (neutral)
- No entry windows: can apply any time
New countries which can now apply: Philippines, Pakistan, Ukraine.

All eligible countries need to apply to receive GSP+, even if they are already
beneficiary under the present scheme

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Enhanced GSP+: improved mechanisms for

implementation of conventions
Current
27 conventions
Entry
- Commitment to ratify and implement conventions, to report and to accept monitoring
Monitoring
- Reporting to Council every 3 years
Withdrawal mechanism
- Onus on EU to show that beneficiary country is in breach of conventions
- Applicable legal benchmark of 'effective implementation' undefined
- Based on reports by international monitoring bodies (e.g. UN, ILO)
- Undefined role for other parties (e.g. civil society)

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Enhanced GSP+: improved mechanisms for

implementation of conventions (continued)
New
27 conventions (Apartheid no longer relevant and falls, UN Framework Convention on Climate Change
in)
Entry
Binding commitment to ratify conventions, to accept monitoring, and to cooperate
Commitment to accept without reservations conventions' reporting requirements
Country has not formulated a reservation which is prohibited by any of those conventions
No serious problems of implementation
Enhanced monitoring
More scrutiny by Council and EP on the basis of Commission report, every 2 years
Withdrawal mechanism
Onus on the beneficiaries to prove positive record
Applicable legal benchmark of 'effective implementation defined
More sources of information allowed (broader than UN, ILO, )
Specific role for "third parties" (e.g., civil society)

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Improvement of temporary withdrawal rules

Current
Reasons:
- Serious and systematic violations of core human and labour rights conventions (on
the basis of monitoring bodies)
- Other grounds specified in the Regulation, e.g. unfair trading practices, noncompliance with customs rules,
Rules apply to standard GSP, GSP+ and EBA

New
Reasons:
- Idem BUT not exclusively on the basis of monitoring bodies; also "third parties"
- Clarification that unfair trading practices include those linked to raw materials
Rules continue to apply to standard GSP, GSP+ and EBA

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More operational safeguards

Current
General safeguards: EU producers have no right to request
action; legal trigger ('serious difficulty') undefined. Clothing
can not benefit from general safeguardsonly from special
safeguards (see below).
Specific safeguards possible for agriculture
Special safeguards for clothing: in case of import volumes
increase by 20% over the year or exceed 12.5% of Union
imports from beneficiary countries (same threshold as in
graduation mechanism). Not applicable for countries
benefitting from EBA or whose share on total imports is below
de minimis (8%).

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More operational safeguards (continued)

New
General safeguards: EU producers have right to seek
action, legal trigger defined (safeguard applies if EU producers
suffer deterioration of their situation). Clothing also can be
subject to general safeguards.
Specific provisions for agriculture maintained
Special safeguards for clothing maintained and extended
to textiles and to ethanol. Thresholds adjusted to 13,5% for
annual increase of imported volumes; 14,5% of share of
imports from GSP beneficiary countries (new graduation
threshold); de minimis share 6%.

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Enhanced transparency and predictability

Current
Scheme has 3-year duration
Rights of parties not always defined
New
More than 1 year for economic operators to adapt to the new
system until new preferences apply on 1 January 2014
Longer duration: 10 years. EBA is open-ended.
Rights of parties are specified and enhanced (GSP+ entry,
withdrawal, safeguards)
Transition periods for countries which no longer benefit (1 year or
2 years, depending on the case)
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Adapating to the Treaty of Lisbon:

Council and EP on equal footing

Current
No role for EP

New

28

Lisbon rules: extensive EP role, equal footing with Council

Recitals

Regulation on procedures:
-application for GSP+
-withdrawal/reinstatement of GSP+
-withdrawal/reinstatement of GSP, GSP+, EBA
-Safeguards

Decisions amending the Annexes

Decision to amend Annex I to
add or remove a country from
the list of eligible countries

Annex I List of eligible countries

Annex VI - GSP Regulation

(amended
byIIordinary
legislative procedure)
Chapter
GSP
Decision to establish or review a list of GSP sections that are suspended
from GSP preferences

Annex II GSP beneficiary list

Decision to amend Annex II to

add or remove a country from the
list of GSP beneficiary countries

Annex V GSP product list

Decision to amend Annex V
to change GSP product list

Annex VI Graduation thresholds

Chapter III GSP+

Decision to amend Annex VI to

change graduation thresholds
Annex III GSP+ beneficiary list

Decision to initiate or terminate GSP+ temporary withdrawal procedure

Annex VIII List of conventions

Decision to amend annex III to temporary withdraw or

to reinstate GSP+ preferences

Decision to amend Annex III to

add or remove a country from the
list of GSP+ beneficiary countries

Annex IX GSP+ product list

Decision to amend the decision to temporary withdraw preferences

Annex VII Vulnerability thresholds

Decision to amend Annex IX

to change
GSP+ product list

Annex IV EBA beneficiary list

Decision to amend Annex VII to

change
vulnerability thresholds

Chapter IV EBA
Decision on rules for implementing the provisions on
imports of sugar products

Chapter V Temporary withdrawals

Decision to amend annex II, III or IV to temporary withdraw or Decision to amend Annex IV to
add or remove a country from
to reinstate GSP, GSP+ or EBA preferences
the list of EBA beneficiary countries

Decision to initiate or terminate GSP,GSP+ or EBA temporary

withdrawal procedure for reasons of Art19(1)
Decision to temporary withdraw the preferences, prolong or terminate
temporary withdrawal in the case of fraud
Decision to immediately reintroduce Common Customs Tariff duties
for a period of up to 12 months in the exceptional circumstances

Decision to amend the decision to temporary withdraw preferences

Chapter VI Safeguards
Chapter I General provisions

Decision to remove preferences

in textile and agriculture sector

Decision to reintroduce Common Customs Tariff duties

due to findings of safeguard investigation

Chapter VII Common provision

Decision to suspend preferences due to serious

disturbance to EU markets, in particular to outermost regions

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Decision to terminate safeguard investigation

Final provisions

Decision to apply surveillance mechanism in agriculture

and fisheries sectors

NEXT STEPS

Delegated acts to amend country lists (2013)

Annex III (GSP+ beneficiaries)
Other amendments also possible
Delegated acts on some procedural aspects (GSP/GSP+
withdrawal, safeguards) (2013)
Adjustment of preferential rules of origin (new beneficiaries)
(2013)
New tariff preferences to apply as from 1 January 2014

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