Access to EU market boosts sustainable growth in low-income countries

A new joint report by the European Commission and the High Representative for the Common Foreign and Security Policy on the Generalised Scheme of Preferences (GSP) – the EU’s main trade policy tool to support developing countries’ exports to the bloc – has confirmed that the system continues to support economic stability and sustainable development in low-income countries, even in times of uncertainty.

In 2022, preferential imports from 65 GSP beneficiary countries reached an all-time high of €80.6 billion. The scheme proved to be beneficial for developing countries during the series of crises that affected global economy, such as the Covid-19 pandemic and the effects of Russia’s unprovoked and unjustified military aggression against Ukraine.

The report also highlights that GSP+ – the special incentive arrangement for sustainable development and good governance – has been effective in improving standards on human and labour rights, environmental and climate protection, and good governance. Positive developments were noted for example in advancing women’s and children’s rights, the fight against torture and ill treatment, and the eradication of child labour and forced labour in several beneficiary countries. As an illustration that this arrangement remains attractive, Uzbekistan joined the GSP+ in April 2021 after eradicating forced and child labour in its cotton harvest, and Tajikistan formally applied to join GSP+ in April 2023.

Despite progress in the implementation and respect of international standards, beneficiary countries continue to face some challenges. Hence, the EU is carefully monitoring the implementation of GSP+ and the respect of the beneficiaries’ obligations, including through monitoring missions as well as financial and technical assistance to support their efforts. Problems persist, for example, with freedom of expression and civil society space, protection against domestic violence, as well as the fight against corruption and ensuring judicial independence.

Regarding environmental standards, many GSP beneficiaries are facing stronger consequences from climate change. While they have in many cases undertaken ambitious commitments and have called for common action across the international community to address climate change and its impacts, capacity and resource constraints often limit their possibilities of implementation.

Links to international standards means that the relevance of GSP stretches far beyond trade and economic development: it is a central platform for engagement with third countries on issues such as labour rights, human rights and environmental protection, and is as such closely linked to the EU’s broader foreign policy and external action.

Background

The GSP is the EU’s main unilateral trade policy to support vulnerable developing countries’ exports to the EU, based on international values and principles. It lowers or removes import duties on products imported to the EU from vulnerable developing countries, covering 65 beneficiary countries and almost 2 billion people. Such preferential access to the EU market is conditional on the respect of international standards on human rights, labour rights, environment and climate, and good governance.

To respond to the diverse needs of the beneficiary countries, the GSP has three different arrangements giving preferential access to the EU market:

• Standard GSP – for low and lower-middle income countries, providing the partial or full removal of customs duties on two-thirds of tariff lines (10 beneficiaries);
• GSP+ – the special incentive arrangement for sustainable development and good governance.  It brings these same tariffs down to 0% for vulnerable low and lower-middle income countries that ratify and implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance (8 beneficiaries);
• EBA (Everything But Arms) – the special arrangement for least developed countries, giving them duty-free, quota-free access for all products except arms and ammunition (47 beneficiaries).

The report is accompanied by ten Staff Working Documents: one for each of the nine GSP+ beneficiaries between 2020 and 2022 (including Armenia which graduated from the GSP in 2022) and one for the three EBA beneficiaries with which the EU has enhanced engagement.

The current GSP Regulation is set to expire at the end of 2023. The legislative procedure to adopt the revised GSP Regulation is still ongoing. In the meantime, a prolongation of the current rules until the end of 2027 has been proposed to ensure continuity and legal certainty. The European Parliament and the Council are in the final stages of approving this prolongation.

For more information

Report on the Generalised Scheme of Preferences covering the period 2020-2022

Staff Working Documents on GSP+ assessment for Armenia, Bolivia, Cabo Verde, Kyrgyz Republic, Mongolia, Pakistan, the Philippines, Sri Lanka, Uzbekistan, and on the enhanced engagement with Bangladesh, Cambodia and Myanmar 

Factsheet on the report

Q&A

Country factsheets for EBA beneficiaries Bangladesh, Cambodia and Myanmar, and the GSP+ beneficiary countries under the reporting period: Armenia, Bolivia, Cabo Verde, Kyrgyzstan, Mongolia, Pakistan, the Philippines, Sri Lanka, Uzbekistan

GSP Website

GSP Hub