WT/COMTD/N/4/Add.6  
 
18 June 2013  
(13-3174)  Page: 1/14  
Committee on Trade and Development  Original: English  
 
 
GENERALIZED SYSTEM OF PREFERENCES 
NOTIFICATION BY THE EUROPEAN UNION 
Addendum 
The following communication, dated 13 June 2013, is being circulated at the request of the 
delegation of the European Union. It contains a notification by the European Union under 
paragraph 2 of the Enabling Clause of their revised Generalized Scheme of Preferences Scheme, 
whose Regulation was published on 31 October 2012 and whose preferences will apply as of 1 January 2014, and is founded on the following legal instrument:   
Regulation (EU) No 978/2012 of the European Parl iament and of the Council of 25 October 2012, 
applying a scheme of generalized tariff prefer ences and repealing Council Regulation (EC) 
No 732/2008 (published in the Official Journal of the European Union (OJ) L 303, 31.10.2012, p. 
1) 
 Link to document: 
http://eur-lex.europa.eu/LexUriServ/LexUri Serv.do?uri=OJ:L:2012:303:0001:0082:EN:PDF    
 
______________ 
 
 
1  THE NEED FOR A REVISION OF THE EUROPEAN UNION'S GENERALIZED SCHEME OF PREFERENCES 
 
1.1.  The European Union's (EU) Generalized System of Preferences or Generalized Scheme of 
Preferences (GSP) is the system of preferenti al trading arrangements through which the EU 
extends preferential access to its markets to developing countries.
1 
1.2.  In line with its traditional approach, the EU engaged in a mid-term review of its current 
instrument as established by Council Regulation (EC) No 732/2008 of 22 July 20082, notified to 
WTO on 12 March 2009 (WT/COMTD/N/4/Add.4). An extensive preparatory analysis (independent 
studies and the European Commission's own impact assessment) and a broad public consultation 
were carried out in 2010 and showed that the scheme had achieved significant results in 
enhancing the welfare of beneficiary countries and in the promotion of sustainable development 
and good governance, but also that room for further improvement still existed.  
1.3.  First of all, there was a need to focus pr eferences on countries which are most in need of 
help: Least-Developed Countries (LDCs) and other poor economies with no other channels of 
preferential access to the EU market. In fact, GS P preferences increase the competitive pressure 
exerted by more advanced countries on exports from poorer countries, whose needs are far greater and thus deserve increased attention.  
                                               
1 Throughout this document, the term “country” refers to a country or territory. 
2 Link to document: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:211:0001:0039:EN:PDF     WT/COMTD/N/4/Add.6 
 
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  1.4.  Furthermore, the effectiveness of the instrument as a tool for sustainable development and 
good governance could also be further improved , particularly through enhanced access to the 
GSP+ scheme and improved mechanisms of implementation.  
1.5.  The analysis also revealed that enhanced transparency in procedures which affect economic 
operators (temporary withdrawals, safeguards etc. ) would provide them with more predictability 
and stability - and thus lead to an enhanced use of preferences to the benefit of developing country partners.  
1.6.  Finally, the entry into force of the Treaty of Lisbon amending the Treaty on European Union 
and the Treaty establishing the European Co mmunity (1 December 2009), required certain 
adjustments in terms of decision-making within the EU. 
1.7.  Given the foregoing, the EU decided to review the instrument. The revised GSP Regulation 
(hereinafter "the GSP Regulation" or "the Re gulation") was adopted on 25 October 2012 and 
published in the Official Journal of the European  Union on 31 October 2012. The tariff preferences 
as established in the new GSP Regulation will be applicable as of 1 January 2014, to ensure that 
economic operators have ample time to adapt to the new provisions. In the meantime, the 
provisions which allow for the preparation of all necessary steps to have a fully operational scheme by 1 January 2014 have entered into force since 21 November 2012. 
1.8.  To ensure continuity of preferences, wh ile the reformed scheme was in preparation, the 
validity of GSP as established in 2008 was prolonged, without any modification, up to 31 December 2013, by Regulation (EU) No 512/2 011 of the European Parliament and of the 
Council of 11 May 2011.
3 
2  THE REVISED GSP REGULATION (1): BETTER FOCUS ON NEED  
2.1.  The revised GSP Regulation maintains a scheme of three arrangements:  
i. the general arrangement, which provides autonomous preferences to developing 
countries; 
ii. the Special Incentive Arrangement for Sustainable Development and Good 
Governance (known as GSP+), which offe rs additional preferences to support 
vulnerable developing countries in their ratification and effective implementation of 
relevant international conventions in these fields; and 
iii. the Everything But Arms (EBA) arrangement, which provides duty-free, quota-free 
access for all LDCs. 
2.2.  This three-pronged approach continues to be op timal, as it allows the EU to tailor support for 
developing countries to their different trade, financial and development needs. However, three core elements have been adjusted to better respond to partners' needs: countries receiving 
preferences, products receiving preferences, and th e so-called "graduation" of competitive sectors.  
2.3.  To enhance the stability and predictability of the scheme, the first two arrangements have 
seen their duration extended from the current th ree years to ten years, while the Everything But 
Arms arrangement remains open-ended to maximise support for LDCs. 
2.1  Focus on countries most in need 2.4.  The revised GSP recognises that developing countries should remain eligible to obtain 
preferences. 'Eligible countries' are listed in Annex I of the Regulation. However, needs differ 
amongst countries, and preferences may be deferred for some of the eligible countries on the 
basis of objective criteria, leading to a list of countries benefitting from preferences (Annex II of the Regulation). The phenomenon of development is per natura  dynamic, so Annex II of the 
Regulation may change over time. On the one hand, as eligible countries meet the objective 
                                               
3 Link to document: http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2011:145:0028:0029:EN:PDF   WT/COMTD/N/4/Add.6 
 
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  criteria for deferral, they may be removed from A nnex II of the Regulation – on the other, if those 
objective criteria for deferral are no longer met, eligible countries may be added to Annex II of the Regulation and enjoy preferences again. Removals  from Annex II of the Regulation carry ample 
transition periods to allow for adaptation by economic operators - additions happen without any 
transition periods to maximise preference use. 
2.5.  The extensive preparatory analysis mentioned above revealed that the scheme was to be 
revised to focus on countries which, due to their specific economic, financial and development 
needs, necessitate the preferences the most. Inde ed, the last decade has seen the emergence of 
more advanced developing countries which have successfully integrated into the world trading 
system, while many poorer ones are lagging behind.  
2.6.  The latter are affected by competition from the more advanced developing countries which 
often export very similar products and GSP pr eferences tend to increase the competitive 
advantage of these more advanced economies. In fact, 40% of preferential exports are absorbed 
by the more advanced countries. This goes some way to explain the disappointing performance of 
the poorest, both in terms of total export growth and of diversification—and thus underscores the 
need to concentrate preferences on those that  most need them: low and lower middle income 
countries which enjoy no other mechanisms of preferential access to the EU market.   
2.7.  This need is becoming even more relevant as tariffs continue to drop as a result of preference 
erosion. The more advanced countries can compete effectively, but the poorer, if they are to successfully join the path of export-led growth  and development, will need to exploit the 
diminishing preferences to the full. In fact, maintaining the status quo  would have led to significant 
losses in exports in particular for LDCs.  
2.8.  GSP preferences are thus focused on 90 partners most in need: 50 countries with LDC 
treatment
4 and 40 lower income economies with no preferential access to the EU.5 
2.9.  In practice, the countries that no longer benefit from the scheme fall into three categories. 
1. Thirty-three countries and territories6, mainly EU territories but also some 
Unites States, Australian and New Zealand territories. The latter territories belong to 
developed countries and therefore do not have the same needs as developing 
countries. As to EU territories, they have their own market access regulation. These territories cease to be eligible for GSP and are not listed in Annex I of the Regulation. Because their exports under GSP are marginal, the revision of the GSP is neutral for 
them. Operators have until 1 January 2014 to adapt to this change. 
 
2. Countries with FTAs or other preferential market access arrangements. These 
countries enjoy another trade arrangement with the EU providing substantially 
                                               
4 Afghanistan, Angola, Bangladesh, Benin, Bhutan, Bu rkina Faso, Burundi, Cambodia, Chad, Central African 
Republic, Comoros Islands, Democratic Republic of the Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, Lao People's Democratic Republic, Liberia, Lesotho, Madagascar, Malawi, Maldives (until end 2013 as they have  exited the LDC list), Mali, Mauritania, Mozambique, 
Myanmar/Burma (preferences, formerly withdrawn; Se e also Footnote 21), Nepal, Niger, Rwanda, Samoa, 
Sao Tome and Principe, Senegal, Sierra Leone, Solomo n Islands, Somalia, South Sudan, Sudan, Tanzania, 
Timor-Leste, Togo, Tuvalu, Uganda, Vanuatu, Yemen, Zambia. 
5 Armenia; Azerbaijan*; Bolivia; Cape Verde; China, People's Republic of; Colombia; Congo; Cook Islands; 
Costa Rica; Ecuador; Georgia; Guat emala; Honduras; India; Indonesia;  Iran*; Iraq; Kyrgyzstan; Marshall 
(islands); Micronesia (federate States of); Mongolia; Nauru; Nicaragua; Nigeria; Niue; Pakistan; Panama; Paraguay; Peru; the Philippines; El Salvador; Sri Lanka;  Syrian Arab Republic; Ta jikistan; Thailand; Tonga; 
Turkmenistan; Ukraine; Uzbekistan; Viet Nam. (*In Ju ly 2012 both Azerbaijan and Iran were classified as 
upper-middle income countries for the third time. Therefor e, 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, which provides an ample transition period for operators to adjust) See link to document: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:048:0001:0004:en:PDF ) 
6 American Samoa, Anguilla, Antarctica, Aruba, Bermuda, Bouvet Island, British Indian Ocean Territory, 
Cayman Islands, Christmas Islands, Cocos Islands, Falkland Islands, French Polynesia, French Southern Territories, Gibraltar, Greenland, Gu am, Heard Island and McDonald Island s, Mayotte, Montserrat, Netherlands 
Antilles, New Caledonia, Norfolk Island, Northern Mariana Islands, Pitcairn, Saint Helena, Saint Pierre and 
Miquelon, South Georgia and South Sandwich Islands, Toke lau, Turks and Caicos Islands, United States Minor 
Outlying Islands, Virgin Islands – British, Virgin Islands- US, Wallis and Futuna. WT/COMTD/N/4/Add.6 
 
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  equivalent (or better) coverage as compared to GSP—this is why these countries use 
GSP preferences marginally, if at all. This includes countries with a Free Trade Agreement or with autonomous arrangements, such as the Market Access Regulation for countries with an Economic Partnership Agreement (EPA). While preferences are 
deferred for these countries, which are not li sted in Annex II of the Regulation, they 
remain eligible to receive preferences again if the preferential market arrangement is 
terminated. As their current use of GSP is marginal, the GSP revision is not expected 
to generate any impact. At the time of the publication of the revised GSP in 
October 2012, the deferral of preferences under this heading involved thirty four countries
7—operators have until 1 January 2014 to adapt to this change. 
 
As countries obtain preferential market access to the EU after the entry into force of 
the revised GSP, their preferences will be deferred. Again with the aim to provide countries and economic operators with ample time for an orderly adaptation to such a 
change, the GSP preferences shall be deferred only after a period of two years as from 
the date of application of the arrangem ent. While some argue that a one-year 
transition period would be sufficient, the potential existence of multiple rules of origin 
(one linked to GSP, another to the preferential market arrangement which is new for 
economic operators) justifies this longer transition period. This is particularly important for small and medium sized enterprises, which typically face more difficulties to understand and apply such new rules. 
 
3. Countries classified as "high income" or "upper middle income" by the World Bank. 
The main goal of the GSP is focused: to respond to the needs of developing countries 
and to enhance exports and, as a result , economic growth—which is typically 
measured by income. Different levels of income signal different needs by partners and elicit a differentiated response by GSP.  
 
2.10.  The income criterion used by the EU’s revised GSP is based on the World Bank’s GNI per capita, Atlas method. In line with the principles of the Enabling Clause, this is an objective, internationally accepted and widely used indicator which every year defines categories of countries 
and reflects different needs to which GSP respon ds. In particular, the needs of high and upper 
middle income economies are no longer comparable to those of poorer developing countries. These more advanced developing countries no longer need preferences to successfully trade with the rest 
of the world—and they have the resources to tackle more complex development problems which, 
by definition, cannot be addressed by GSP. As und erlined above, continuing to provide preferences 
to them increases the competitive pressure on exports from LDCs and other poor countries, whose 
needs in terms of export enhancement and inco me growth are much more acute and pressing. 
2.11.  Countries will see their preferences de ferred only when they are classified by the 
World Bank as high or upper middle income economie s three times in a row, i.e., in the last three 
lists which are published each year in the month of July by that institution. While deferral could 
have been triggered by a single classification as "high" or "upper middle income", a repeated and 
consecutive classification serves as an additional confirmation that income levels have changed structurally, indicating therefore a different set of needs.  
2.12.  The revised GSP thus deferred preferences under this heading for seven high-income 
countries (and one territory)
8 and 12 upper-middle income countries.9 Negative impact on these 
countries’ exports is typically marginal, given that for more advanced developing countries, 
exports under GSP do not constitute a significant proportion of their total exports to the EU, and 
that preference margins for many products are low, due to the low level of the EU’s MFN tariffs. The important point here is that even marginal drops in exports by the more advanced, bigger economies, can however potentially provide significant opportunities for the poorest, whose 
exports are very small in comparison. Again, th e economic operators from the 20 countries and 
territories involved have until 1 January 2014 to adapt to this change.  
                                               
7 Algeria, Antigua and Barbuda, Bahamas, Barbados, Belize, Botswana, Cameroon, Côte d'Ivoire, Dominica, 
Dominican Republic, Egypt, Fiji, Ghana, Grenada, Gu yana, Jamaica, Jordan, Lebanon, Kenya, Mauritius, 
Mexico, Morocco, Namibia, Papua New Guinea, Saint Kitts and Nevis, Saint Lucia, Saint-Vincent and the Grenadines, Seychelles, South Afri ca, Surinam, Swaziland, Trinidad and Tobago, Tunisia, Zimbabwe. 
8 Bahrain, Brunei Darussalam, Kuwait, Macao, Om an, Qatar, Saudi Arabia, United Arab Emirates. 
9Argentina; Belarus; Brazil; Cuba; Gabon; Kazakhstan; Libya; Malaysia; Palau; Ru ssian Federation; Uruguay; 
Venezuela, Bolivari an Republic of. WT/COMTD/N/4/Add.6 
 
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  2.13.  The situation of eligible countries is review ed every year. Those which are classified as high 
or upper middle income countries three times in a row will see their preferences deferred, and they will exit Annex II of the Regulation with a transition period of one year, which again allows for ample time to adapt to the new situation. Should an eligible country with no other preferential 
market access arrangements to the EU be classified once as a lower-middle or low income 
economy
10, it will be immediately reintegrated into Annex II and enjoy GSP preferences.  
2.14.  GSP rules of origin are in the process of being adapted to the revised GSP country 
coverage.11 Regional cumulation as such can only take place among countries that benefit from 
GSP preferences (those in Annex II of the Regulati on). This ensures the non-discriminatory nature 
of the scheme and is the only adaptation to the enhanced GSP rules of origin which apply since 
1 January 2011 with the objective of expanding the use of GSP by beneficiaries. 
2.2  Focus on products most in need (1):  a limited expansion of product coverage 
2.15.  The new GSP incorporates a limited expansion in product coverage and preference margins: 
 15 new tariff lines are added to GSP as “non-sensitive” (duty-free access)12; 
 4 tariff lines under GSP which were “sensitive ” (duty reduction) turn to "non-sensitive" 
(duty-free access)13; 
 4 new tariff lines are added to GSP+ (duty-free access).14 
2.16.  These products have been carefully selected. Why such a careful selection, leading to a 
relatively modest number of lines? The reason is that the poorest (LDCs) already have duty-free, 
quota-free access for all products (except arms). This means that they have an advantage for those products, they can export them without duty while other developing countries have to pay 
duties. Increasing the scope of products pref erences could make LDC exports relatively less 
attractive. This would set the poorest back, rather than help them. This discussion underlines a general point: products from developing countries are competing amongst each other in the EU, 
and preferences often determine which country can sell products and which does not. 
2.17.  This whole question should be seen in context. In fact, product coverage under GSP is 
already very high: 66% of tariff lines. If we add 25% of other lines which are already at 0% 
normal duty, only 9% tariff lines are today outsid e GSP. The room for expansion is thus limited—
underlining the generosity of the scheme. 
2.18.  The EU’s decision has thus focussed on tariff lines which would expand the opportunities to 
export of GSP and GSP+ beneficiaries, but would minimise any impact on LDCs. 
2.3  Focus on products most in need (2):  updates to the sectoral graduation mechanism 
2.19.  Some developing countries with low per ca pita incomes have successful export sectors for 
certain industries. These industries are competit ive, do not need preferences to successfully 
penetrate world markets and, with the help of GS P preferences, could put competitive pressure on 
less advanced sectors in other low and lower-income economies, which genuinely require preferences to export, diversify and grow. Theref ore, the EU’s GSP scheme withdraws preferences 
to such sectors on the basis of a "graduation" mechanism. Graduation takes place if a country 
achieves competitiveness (measured by attaining a certain percentage of total imports from beneficiaries) across a range of products from an industry (called a “section” of products) on a sustained basis (over a period of three years). Pr eferences are then suspended for the products in 
that section from the country concerned.   
                                               
10 Or as a LDC by the United Nations. 
11 Publication is expected in June 2013, providing economic operator with ample time to adapt. 
12 CN codes 280519, 280530, 281820, 310221, 310240, 310250, 310260, 320120, 780199, 810194, 810411, 
810419, 810720, 810820, 810830. 
13 CN codes 06031200, 24011060, 39076020, 85219000. 
14 CN codes 280519, 280530, 281820, 780199. WT/COMTD/N/4/Add.6 
 
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  2.20.  The revised GSP maintains the core prin ciples behind graduation but revises three 
elements: 
 Product sections used for graduation are expanded from 21 to 32. This ensures that 
graduation is more objective, as the products in the categories are more homogenous. 
This avoids that graduation “overshoots”, removing preferences for certain 
uncompetitive products simply because they are in a section which includes other very competitive products from a different industry. 
 Graduation thresholds increase from 15% to 17.5% (and from 12.5% to 14.5% for 
textiles). Given the drop in the number of beneficiaries, graduation would happen sooner. An increase in the thresholds is necessary to ensure that only those sections which are competitive are graduated.  
 Graduation no longer applies to GSP+ countries. Like EBA countries, GSP+ countries are 
vulnerable and display a non-diversified export base. Given that graduation has never applied to EBA, GSP+ countries should be treated in the same fashion. This would also 
make GSP+ more attractive to potential applicants (see below). 
2.21.  On the whole, revamped graduation suspends preferences for sectors that no longer need 
them—and provides opportunity to those most in need of help. The first set of graduated sectors 
under the revised GSP was published in December 2012.
15 Again, this provides economic operators 
with ample time to adapt, as graduation  will apply as of 1 January 2014 and until 
31 December 2016. GSP tariff preferences are removed for up to seven countries (graduation) and re-established for one country (de-graduation). Th e following table shows the country and product 
combination under graduation under the current and the revised GSP scheme.   
                                               
15 Link to document: 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2012:348:0011:0013:EN:PDF   WT/COMTD/N/4/Add.6 
 
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  Graduated sections (period 2009-2013) Graduated sections (period 2014-2016) 
 Brazil , Section IV: Prepared foodstuffs; 
beverages, spirits and vinegar; tobacco and manufactured tobacco substitutes ); S-IX: 
Wood and articles of wood; wood charcoal; cork and articles of cork; manufactures of straw, of esparto or of other plaiting . 
 
 China :  
All sectors graduated, with the exception of:  Section I: Live animals; animal products  
Section II: Vegetable products  
Section III: Animal or vegetabl e fats and oils 
and their cleavage products; prepared edible fats; animal or vegetable waxes  
Section IV:  Prepared foodstuffs; beverages, 
spirits and vinegar; tobacco and manufactured tobacco substitutes  
Section V: Mineral products  
Section X: Pulp of wood or of other fibrous 
cellulosic material; recovered (waste and scrap) paper or paperboard; paper and paperboard and articles thereof  
Section XIb: Articles of apparel and clothing 
accessories  
Section XIX: Arms and ammunition; parts and 
accessories thereof.  
 Indonesia , Section III ( Animal or vegetable 
fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes ). 
 
 Malaysia, Section III ( Animal or vegetable 
fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes ). 
 
 Thailand, Section XIV ( Natural or cultured 
pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation 
jewellery; coin ). 
 
 Viet Nam , Section XII ( Footwear, headgear, 
umbrellas, sun umbrellas, walking sticks, seat-sticks, whips, riding crops and parts thereof; prepared feathers and articles made 
therewith; artificial flowers; articles of human hair)  China:  
All sectors graduated, with the exception of: 
 Section 2a: vegetable products  
Section 3:  animal or vegetable oils, fats and 
waxes   
Section 4a: meat products   
Section 4c: tobacco  
Section 5: mineral products  
 

 India : Section 5: mineral products ; Section 
6a: inorganic and organic chemicals ; Section 
6b: chemicals, other than organic and 
inorganic chemicals ; Section 8a:  raw hides and 
skins and leather ; Section 11a: textiles ; 
Section 17b: road vehicles, bicycles, aviation 
and space, boats and parts thereof . 
 
 Indonesia: Section 1a: live animals and 
animal products excluded fish ; Section 3: 
animal or vegetable oils, fats and waxes 
remains graduated ; Section 6b: chemicals, 
other than organic and inorganic chemicals .  
 
 Thailand  Section 4a: preparations of meat 
and fish ; Section 4b: prepared foodstuffs (excl. 
meat and fish), beverages, spirits and vinegar ; 
Section 14: Pearls and precious metals   
 
 Ecuador* : Section 2a: vegetable products ; 
Section 4a: preparations of meat and fish .  
 
 Ukraine* : Section 17a: railway and tramway 
vehicles and products .  
 
 Nigeria* : Section 8a:  raw hides and skins and 
leather.  
 
 Costa Rica* : Section 2b: vegetables and 
fruits. 
  Viet Nam  exports included in former Section XII 
(now: Section 12a and Section 12b) have been de-graduated.  * The country is eligible to apply for GSP+. In case it is granted GSP+ treatment, graduation would not apply.  
 
3  A MORE FAVOURABLE SPECIAL INCENTIVE ARRANGEMENT FOR SUSTAINABLE 
DEVELOPMENT AND GOOD GOVERNANCE (GSP+) FOR BENEFICIARIES 
3.1.  As in the current scheme, the revised GSP+ offers additional, more generous preferences for 
vulnerable countries which ratify and effectively implement international conventions in the fields 
of human rights, core labour standards, sust ainable development and good governance. The 
revised GSP+ maintains the same building blocks of the current scheme, but improves upon them 
to provide a more favourable regi me for GSP beneficiaries to promot e core international principles.  
3.1  Same number but more relevant international conventions 3.2.  The number of relevant international conven tions (listed in Annex VIII of the Regulation) has 
not been expanded and stays at 27. This ensures that beneficiaries have a genuine opportunity to 
focus on the essentials. The International Convention on the Suppression and Punishment of the WT/COMTD/N/4/Add.6 
 
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  Crime of Apartheid, which fortunately has lost relevance, is replaced by the United Nations 
Framework Convention on Climate Change (UNFCCC). 
3.2  Powerful new incentives to join 3.3.  The revised GSP will provide powerful incent ives to join GSP+ and to implement the 27 core 
conventions: 
 There will be less competition from more advanced developing economies and sectors 
which do not receive preferences. 
 As explained above, GSP+ countries will no longer be "graduated" by sections, providing 
more opportunities to expand trade. 
 3.3   More GSP beneficiaries can apply 
3.4.  Vulnerable GSP beneficiaries are eligible to apply for GSP+. Vulnerability is defined on the 
basis of two criteria: integration into trade and diversification. The revised GSP+ relaxes the "vulnerability criterion" so more countries can apply. In particular, the integration-into-trade 
threshold (the percentage value of the country’s GSP-covered exports to the EU as compared to 
the total GSP-covered exports to the EU of all GSP beneficiaries) is increased from 1% to 2%.
16  
3.5.  The diversification threshold has also been  adapted: the number of sections of GSP-covered 
products which are used to calculate the degree of "diversification" goes from 5 to 7. However, this 
is done simply to align the threshold to the extended number of sections (see above) and has no practical impact. 
3.6.  The list of countries which, by meeting the criteria, are able to lodge an application for GSP+ 
preferences, was published in the form of an Information Notice on 18 December 2012.
17 
3.4  Countries can apply at any time and wi th enhanced transparency and objectivity  
3.7.  Applications will be accepted at any time  and not only during limited "time windows" every 
18 months, as was the case before. 
3.8.  In addition, the application process is more transparent and objective. To start with, the 
concept of “effective implementation” has been codified for the first time, on the basis of past 
practice (see art. 2.l). In addition, the entry criteria linked to conventions have been 
comprehensively spelled out (see art. 9) — and so have been the procedural aspects of the application and entry process, with an emphasis on rights of defence of the applicant countries, 
and on mandatory deadlines for the EU institutions to take decisions.
18 Predictability is thus 
maximised. 
3.9.  As successful applicants enter the GSP+  scheme, Annex III of the Regulation, will be 
updated. At the time of drafting of this do cument, 11 GSP beneficiaries had applied for GSP+.19 
3.5   Helping GSP+ beneficiaries to im prove the implementation of conventions 
3.10.  The mechanism to track the implementation  of conventions by GSP+ countries has also 
been improved. This allows a better understanding of those areas that GSP+ beneficiaries should 
concentrate on to achieve effective implementation, and allows EU institutions to react to failures 
of implementation in a more timely and objective manner. In particular: 
 Countries should fully cooperate with international monitoring bodies, without 
reservations. 
                                               
16 Pakistan, the Philippines and Ukraine would thus become eligible. 
17 Link to document: http://trade.ec.europa.eu/doclib/docs/2012/november/tradoc_150043.pdf    
18 Link to document: http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150584.pdf    
19 Armenia, Bolivia, Cape Verde, Cost a Rica, Ecuador, Georgia, Maldives , Mongolia, Pakistan, Paraguay and 
Peru. WT/COMTD/N/4/Add.6 
 
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   Countries should fully cooperate with the EU institutions' monitoring process, which will be 
more frequent, with reports every two instead of three years. 
 Withdrawal mechanisms will be more objective.  To complement the reports of international 
monitoring bodies, the EU may use other sources of accurate information. Also, when 
evidence points to problems with implementation, the country concerned will be requested 
to show a positive record. 
 
4  EVERYTHING BUT ARMS: MAXIMISING THE BENEFITS OF "DUTY-FREE, QUOTA-FREE" 
4.1.  The revised GSP cannot enhance tariff preferences  which already are duty free, quota free for 
all products but arms20 - but the benefits  that these preferences can bring for LDCs must be 
exploited to the maximum extent. The EU took an important first step to enhance these benefits 
with the recently amended more favourable and accessible GSP Rules of Origin, which apply since 
1 January 2011. 
4.2.  The revision of GSP signals a further important step to ensure a maximum enhancement of 
exports by LDCs thanks to EBA preferences. As explained above, this enhancement emanates from 
the lower degree of competition for LDCs from mo re advanced developing economies and sectors 
which do not receive preferences. This is fund amental in a context where, due to preference 
erosion, LDCs would have stood to lose significant export revenue if such pressure had not been 
relieved. 
5  ENHANCING STABILITY AND PREDICTA BILITY: DURATION OF THE SCHEME, 
TRANSITION PERIODS, TEMPORARY WITHDRAWAL INVESTIGATIONS AND SAFEGUARD 
MECHANISMS 
5.1.  While less prominent in the discussions su rrounding GSP than other topics, stability and 
predictability are the cornerstones of a successful GSP. At the end of the day, importers and 
exporters choose to use preferences only if these are stable and predictable. Therefore, it is 
difficult to underestimate the importance of these factors if we are to extract the maximum benefit of preferential tariffs for developing country pa rtners. This is why the revised GSP has enhanced 
the stability and predictability of the scheme in several ways.  
5.1  Duration, transition periods 5.2.  While EBA remains open-ended, the rest of the scheme will no longer end every three years, 
as it is currently the case. Rather, it will last ten years. 
5.3.  Transition period between publication of the revised GSP (21 October 2012) and its 
application (1 January 2014) also provides ample time for economic operators to adapt.  
5.4.  Deferral of preferences for countries due to income will occur only after countries are listed 
as high or upper-middle income three years in a ro w. In addition, a transition period of one year 
will apply providing ample time to adapt. 
5.5.  Deferral of preferences for countries due to  the application of other preferential market 
access arrangements will occur with a transition period of two years—again proving for ample 
adaptation time.  
5.6.  Deferral of preferences for sectors of products is applicable for three years, and also carries a 
transition period of one year for all operators to adapt. The publication of enhanced, timely 
statistics for this specific purpose under the revise d GSP will further add to the predictability and 
forward planning of economic operators, as they wi ll be able to better judge risk as export volumes 
approach the graduation thresholds. 
                                               
20 The coverage of the EBA arrangement now includes th ose products (rice and sugar) which were subject to 
transitional provisions for imports: full liberalisation for EBA beneficiaries was applicable as of 31 October 2012. 
The reformed scheme only requires an import licence for imports under tariff heading 1701 (sugar), from 1 January 2014 until 30 September 2015. WT/COMTD/N/4/Add.6 
 
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  5.2  Withdrawal investigations 
5.7.  Withdrawals of preferences of any of the three arrangements are exceptional.21 Any of the 
GSP arrangements may be temporarily withdrawn for serious and systematic violations of core human and labour rights conventions and on a number of other grounds such as unfair trading 
practices and serious shortcomings in customs controls. In addition, GSP+ benefits may be 
temporarily withdrawn if the national legislation of a GSP+ beneficiary country no longer incorporates the relevant conventions or if that legislation is not effectively implemented. 
Temporary withdrawal is preceded by an investigation.  
5.8.  Despite the inherent rarity of withdrawals (and investigations), it was felt that the 
mechanisms should be made as transparent, object ive and predictable as possible. This is why the 
revised GSP has foreseen the adoption of a legislative act regarding the procedures for withdrawal 
of the three arrangements (including, as explaine d above, the GSP+). This legal act (which is 
currently under discussion and will be operationa l before the application of preferences on 
1 January 2014) will provide for more detail and transparency on procedures, with respect to 
deadlines, rights of parties, confidentiality and review. This will not only make it easier for 
operators to understand the process (and thus to plan ahead), but will make the investigations m o r e  o b j e c t i v e ,  a s  o p e r a t o r s  w i l l  b e  a b l e  t o  p r o v i d e  e v i d e n c e  ( w h i c h  m u s t  b e  a d e q u a t e  a n d  
accurate) and to participate in the process. This is the most salient change in a mechanism which 
maintains the same essence of its predecessor.  
5.3  Safeguards 5.9.  "Safeguards" (mechanisms to temporarily reintroduce MFN conditions for certain products 
under preferences) have never been used, and th e revised GSP does nothing to change the EU’s 
approach in this respect. However, and as with withdrawals, it was felt that provisions could be more transparent, objective and predictable.  
5.10.  For example, the general mechanism for te mporary reinstatement of MFN conditions did not 
explicitly define what the trigger for such action ("serious difficulties") was. This has been done under the revised GSP. Also, as with withdrawal in vestigations, the EU will publish a legislative act 
establishing rules related to the procedure for adopting general safeguard measures in particular 
with respect to deadlines, rights of parties, confidentiality, disclosure, verification, visits and review. This will provide for more comprehensive, clearer participation of parties, from EU producers (which can seek reinstatement) to expo rters (which have enhanced rights of defence). 
The outcome of hypothetical investigations will thus be as objective and predictable as possible.  
5.11.  The revised GSP maintains specific "safeguard" provisions for clothing and extends them to 
plain textiles and to certain ethanol products.
22 These specific mechanisms do not apply to EBA 
beneficiaries, nor to countries with a share of total EU imports below 6%. Ethanol products must 
increase by at least 13.5% in quantity (by volume) on a yearly basis for the reintroduction of MFN to occur. For all clothing and plain textiles, reintroduction may occur if imports increase by at least 
13.5% in quantity (by volume) on a yearly basis or if these imports reach 14.5% of total imports 
from GSP beneficiaries. Meeting these thresholds is likely to remain exceptional, as in the current GSP scheme. 
6  ADAPTATION TO NEW INSTITUTIONAL FRAMEWORK 
6.1.  The new institutional framework of the EU’s Treaty of Lisbon, with the enhanced role of the 
European Parliament in trade policy, is reflected in the revised GSP. Most decisions will be made by the Commission and can only be overturned by a qu alified majority of EU Member States or by a 
simple majority of the European Parliament with in a specified maximum time frame (two months 
from a Commission decision, which can be extended by a further two months). Decisions regarding a limited number of issues, in particular safeguards  investigations and suspension of preferential 
arrangements as well as surveillance in the agricultural and fisheries sectors will be made by the 
                                               
21 Only Belarus (general arrangement), Myanmar/Burma (general arrangement) and Sri Lanka (GSP+) have 
seen preferences withdrawn. The EU is in the proce ss of reinstating preferences (in this case EBA) for 
Myanmar/Burma.  
22 Products from GSP sections S-11a an d S-11b of Annex V of the Regulation and products falling under CN 
codes 22071000, 22072000, 29091910, 38140090, 38200000 and 38249097. WT/COMTD/N/4/Add.6 
 
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  Commission if approved by EU Member States. Modifications of the GSP scheme as such are made 
via the ordinary legislative procedure, i.e. joint decision of the European Parliament and the Council of the EU on a proposal su bmitted by the European Commission. WT/COMTD/N/4/Add.6 
 
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  ANNEX 1 
 
 Regulation (EU) No 978/2012 of the European Parliament and of the Council of 
25 October 2012, applying a scheme of generaliz ed tariff preferences and repealing Council 
Regulation (EC) No 732/2008 (published in the Official Journal of the European Union (OJ) L 
303, 31.10.2012, p. 1) 
 
 
ANNEX 2 
 
GUIDE TO INTERNET RESOURCE S ON THE EUROPEAN UNION  
GENERALIZED SCHEME OF PREFERENCES (GSP) 
 
 
1  EU GSP SCHEME 
 Overview of the GSP scheme: objective, arrangements, graduation, trade volumes under 
GSP and value of preferences 
 GSP key legislation and policy documents,  GSP technical amendments and related 
information 
 Everything But Arms (EBA) arrangement:  Overview and list of beneficiary countries 
 Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+): 
GSP+ eligible countries under the revised GSP scheme, list of international conventions to 
qualify for GSP+. 
http://ec.europa.eu/trade/policy/countries-and-r egions/development/generalised-scheme-of-
preferences/  
 
2  EU EXPORT HELPDESK  
The EU Export Helpdesk is an online service, prov ided by the European Commission, to facilitate 
market access for developing countries to the European Union.  
This free and user-friendly service provides releva nt information such as import requirements and 
taxes, import tariffs, customs documents, rules of origin and trade statistics required by 
developing country exporters interested in supplying the EU market. It also offers the possibility to 
lodge detailed information requests about real-life situations encountered by exporters.  
The Export Helpdesk is available in English, French, Spanish and Portuguese. 
http://exporthelp.europa.eu/thdapp/index.htm  
 
3  COMBINED NOMENCLATURE (CN) 
The CN is comprised of the Harmonized System (HS) nomenclature with further EU subdivisions. 
The basic legislation is Council Regulation (E EC) No 2658/87 on the tariff and statistical 
nomenclature and on the Common Customs Tariff. http://eur-lex.europa.eu/LexUriServ/Le xUriServ.do?uri=CELEX:31987R2658:en:NOT   
An updated version of the Annex I to the Combined Nomenclature1 Regulation is published as a 
Commission Regulation every year in the L-series  of the Official Journal of the EU. The 2012 
version of the Combined Nomenclature, which ente red into force on 1 January 2012, is available 
at: 
http://eur-lex.europa.eu/LexUriServ/LexUri Serv.do?uri=OJ:L:2011:282:0001:0912:EN:PDF  
                                               
1 http://eur-lex.europa.eu/JOHtm l.do?uri=OJ:L:2008:291:SOM:en:HTML  WT/COMTD/N/4/Add.6 
 
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  More information on the Combined Nomenclature: 
http://ec.europa.eu/taxation_customs/customs/customs_duties/tariff_aspects/combined_nomencl
ature/  
 
4  EU ONLINE CUSTOMS TARIFF DATABASE – TARIC 
Overview of electronic databases on the EU taxation and customs: 
http://ec.europa.eu/taxation_customs/common/databases/index_en.htm  
 TARIC database on the Integrated EU Tariff: http://ec.europa.eu/taxation_customs/dds/tarhome_en.htm  
 
Public site providing information and downloadable tariff data in tabular form, extracted from the 
TARIC database. The data are updated monthly: http://circa.europa.eu/Public/irc/taxud/taric_data/home  (Click 'Library' and then select 'Duties and 
related files') 
 5  GSP RULES OF ORIGIN 
GSP rules of origin determine whether or not goods produced in the beneficiary countries are 
eligible for preferential tariff treatment under  the GSP scheme. They are provided for by 
Commission Regulation (EEC) No 2454/93: http://eur-lex.europa.eu/LexUriServ/Le xUriServ.do?uri=CELEX:31993R2454:EN:NOT  
 
More information on the GSP rules of origin:  http://ec.europa.eu/taxation_customs/customs/customs_duties/rules_origin/preferential/article_7
81_en.htm   
 
6  EU TRADE DATA 
External trade statistical data - Comprehensive databases of statistics on EU imports and exports: 
 
 DG TRADE's statistics on the EU bilateral trade with respective trading partners 
http://ec.europa.eu/trade/issues/bilateral/data.htm   
 
 EUROSTAT's statistics databases, including on EU external trade 
 http://epp.eurostat.ec.europa.eu/portal/page/portal/statistics/search_database   
 
 EUROSTAT's COMEXT database  
http://epp.eurostat.ec.europa.eu/newxtweb/  
 
 User Guide on the Statistics on the Trading of Goods 
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-BM-06-001/EN/KS-BM-06-001-
EN.PDF   
 
7  KEY LEGISLATION ON THE REVISED GSP  
 Regulation (EU) No 978/2012 of the European Parliament and the Council of 
25 October 2012 applying a scheme of generalized tariff preferences and repealing Council 
Regulation (EC) No 732/2008: http://trade.ec.europa.eu/doclib/docs/2012/october/tradoc_150025.pdf   
 
 Commission Delegated Regulation (EU) No 154/2013of 18 December 2012 amending 
Annex II to Regulation (EU) No 978/2012 of th e European Parliament and of the Council 
applying a scheme of generalized tariff preferences 
http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150585.pdf   
 
 Commission Delegated Regulation (EU) No 155/2013 of 18 December 2012 establishing 
rules related to the procedure for granting the special incentive arrangement for sustainable 
development and good governance under Regu lation (EU) No 978/2012 of the European 
Parliament and of the Council applying a scheme of generalized tariff preferences 
http://trade.ec.europa.eu/doclib/docs/2013/february/tradoc_150584.pdf   WT/COMTD/N/4/Add.6 
 
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   Commission Implementing Regulation No 1213/2012 of 17 December 2012 suspending the 
tariff preferences for certain GSP beneficiary countries in respect of certain GSP sections in accordance with Regulation (EU) No 978/2012 of the European Parliament and of the Council applying a scheme of generalized tariff preferences 
http://trade.ec.europa.eu/doclib/docs/2012/december/tradoc_150166.pdf
 
 
 
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