The EU Generalised System of Preferences (GSP) 2009-2011

The GSP scheme 

The GSP is an autonomous trade arrangement through which the EU provides non-reciprocal preferential access to the EU market to 176 developing countries and territories, in the form of reduced tariffs for their goods when entering the EU market. It is applicable for a period of three years at a time.  

Tariff preferences on the EU market enable Developing Countries to generate additional export revenue to support implementation of their own sustainable development and poverty reduction policy strategies. 

There has been a significant increase in recent years in the value of preferential imports

under GSP. Imports under the scheme totaled €51 billion in 2006 (an increase of 10% over 2005) and €57 billion in 2007 (an increase of 12% over 2006). Imports from LDCs increased by 35% in 2006 and then remained broadly stable in 2007. 

The new GSP Regulation for 2009-11 

With the current three-year phase of GSP set to expire at the end of 2008, a new GSP scheme has been adopted by the EU Commission for the period from 1 January 2009 to 31 December 2011. 

Under the new GSP scheme, Malaysian export of textile and apparels to EU will still be entitled for duty preference. Exporters can check the information and the duty rates from EU Taxation and Customs website as below :  

http://ec.europa.eu/taxation_customs/dds/cgi-bin/tarchap?Lang=EN 

Graduation and De-graduation 

Whenever an individual country's performance on the EU market over a three-year period exceeds or falls below a set threshold, preferential tariffs are either suspended or reestablished. Graduation is triggered when a country becomes competitive in one or more product groups and is therefore considered no longer to be in need of the preferential tariff rates. 

As a result of the re-calculations made on trade data for the period 2004-06, GSP preferences will be re-established for six countries and suspended for one, in the following beneficiary country and product group combinations:

De-graduation (re-establishment of preferences):

  • Algeria  (Mineral products)

  • India  (Jewellery, pearls, precious metals and stones)

  • Indonesia  (Wood and articles of wood)

  • Russia  (Products of the chemical or allied industries and  Base metals)

  • South Africa  (Transport equipment)

  • Thailand  (Transport equipment)

Graduation (suspension of preferences):

  • Vietnam  (Footwear, headgear, umbrellas, sun umbrellas, artificial flowers, etc….)

The net effect of these adjustments is worth at least €160 million to beneficiary countries in terms of import duties that would otherwise be imposed.

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