Study in support of an impact assessment to prepare the review of GSP Regulation No 978/2012

For the European Commission we prepared a study in support of an impact assessment to prepare the review of GSP Regulation No 978/2012 applying a scheme of generalised tariff preferences (the generalised scheme of preferences, GSP). The study analyses a number of policy options for the European Union’s GSP after the expiry of the current scheme at the end of 2023 (now postponed). These policy options were defined by the Commission regarding the scope, coverage and implementation modalities of the future scheme.

The study assesses the potential economic, social, human rights and environmental impacts both in GSP beneficiary countries and the EU, while also considering legal, institutional and procedural issues. This report presents the findings and recommendations related to the various policy options considered.

Final report (June 2021)

Other key documents and links

Background to the EU GSP

Since 1971, the EU GSP scheme offers easier access to the EU market for goods exported from developing countries by eliminating or reducing import tariffs unilaterally (i.e. on a non-reciprocal basis). The rationale of the GSP is to offer easier access to the EU market in order to promote sustainable economic, social and environmental development in developing countries – in particular, the poorest and most vulnerable ones – with the primary objective of reducing poverty.

The GSP consists of three distinct arrangements with different beneficiary countries and levels of preferences:

  • The Standard GSP for low and lower-middle income countries provides partial or full removal of customs duties on about two-thirds of the EU’s tariff lines. This arrangement currently (as of 2019) has 15 beneficiary countries.
  • The special incentive arrangement for sustainable development and good governance (GSP+) reduces the same tariffs to 0% for “vulnerable” low and lower-middle income countries that have ratified and implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance. The GSP+ currently has 8 beneficiary countries.
  • The Everything But Arms (EBA) arrangement, which currently has 48 beneficiary countries, provides least developed countries (LDCs) with duty-free, quota-free market access for all their products except arms and ammunition.

The current legal basis for the GSP, Council Regulation (EU) No 978/2012 of 25 October 2012, will expire at the end of 2023. If no new GSP Regulation is enacted, the Standard GSP and the GSP+ will be discontinued, and imports from the current beneficiary countries would attract the “normal” EU tariffs; only the EBA would continue to be applied. Depending on how much a beneficiary country exports to the EU, this could negatively affect growth, employment and investment in beneficiary countries.

A midterm evaluation (published in October 2018) of the GSP concluded that the current framework is largely effective and delivering on its objectives. The European Parliament in a non-legislative resolution of March 2019 also acknowledged the positive impact of the GSP Regulation and made a number of recommendations for its review. These focus on encouraging export diversification, placing more emphasis on improving environmental standards, stakeholder engagement and better monitoring of GSP implementation.

The European Commission prepared an impact assessment to examine the economic, social, environmental, and human rights impacts of possible policy options for various elements of a new EU GSP regulation. The study by BKP Economic Advisors and colleagues, supported the impact assessment by analysing the need for, and the relative advantages and disadvantages of, the several options for improvement that have arisen from the evaluation work.