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GSP Schemes

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What is the Generalized System of Preferences (GSP)?

As stated in Resolution 21 (ii) taken at the UNCTAD II Conference in New Delhi in 1968,

"… the objectives of the generalized, non-reciprocal, non-discriminatory system of preferences in favour of the developing countries, including special measures in favour of the least advanced among the developing countries, should be:

(a) to increase their export earnings;

(b) to promote their industrialization; and

(c) to accelerate their rates of economic growth."

Under GSP schemes of preference-giving counties, selected products originating in developing countries are granted reduced or zero tariff rates over the MFN rates. The least developed countries (LDCs) receive special and preferential treatment for a wider coverage of products and deeper tariff cuts.

The idea of granting developing countries preferential tariff rates in the markets of industrialized countries was originally presented by Raul Prebisch, the first Secretary-General of UNCTAD, at the first UNCTAD conference in 1964. The GSP was adopted at UNCTAD II in New Delhi in 1968.

In 1971, the GATT Contracting Parties approved a waiver to Article I of the General Agreement for 10 years in order to authorize the GSP scheme. Later, the Contracting Parties decided to adopt the 1979 Enabling Clause, Decision of the Contracting Parties of 28 November 1979 (26S/203) entitled "Differential and more favourable treatment, reciprocity and fuller participation of developing countries", creating a permanent waiver to the most-favoured-nation clause to allow preference-giving countries to grant preferential tariff treatment under their respective GSP schemes.

There are currently 13 national GSP schemes notified to the UNCTAD secretariat. The following countries grant GSP preferences: Australia, Belarus, Bulgaria, Canada, Estonia, the European Union, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States of America.

Note: The excerpt above is taken from UNCTAD's website. For more information about GSP, please visit

Last Updated ( Monday, 07 January 2013 17:37 )  
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