COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on applying a generalised scheme of tariff preferences and repealing Regulation (EU) No 978/2012 of the European Parliament and of the Council
Date: 2021-09-22
Institutions: Directorate-General for Trade and Economic Security, European Commission
Subjects: EU market, common commercial policy, developing countries, development aid, generalised preferences, market access, poverty, rule of law, sustainable development, tariff preference

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  EN 

   EUROPEAN COMMISSION  Brussels, 22.9.2021  SWD(2021) 267 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT REPORT  Accompanying the document Proposal for a Regulation of the European Parliament and of the Council on applying a generalised scheme of tariff preferences and repealing Regulation (EU) No 978/2012 of the European Parliament and of the Council     {COM(2021) 579 final} - {SEC(2021) 330 final} - {SWD(2021) 266 final}  
 
 
Executive Summary Sheet (Max 2 pages) 
IMPACT ASSESSMENT on Proposal for a Regulation of the European Parliament and of the Council 
applying a scheme of generalised tariff preferences for the period from 1 January 2024 
A. Need for action 
What is the problem and why is it a problem at EU level?  
GSP Regulation (EU) No 978/2012 will expire at the end of 2023. If no new GSP regulation is adopted, 
the Standard GSP and the GSP+ arrangements of the GSP would be discontinued and the EU would need 
to  charge  imports  from  the  current  beneficiary  countries  (developing  low  and  lower-middle  income 
countries) with most favoured national (MFN) tariffs. Only the Everything But Arms (EBA) arrangement 
for the least developed countries (LDCs), which is open-ended, would continue to be applied. This would 
negatively  affect  exports  and  investments,  hence  economic  growth  and  jobs  in  the  current  15  Standard 
GSP and nine GSP+ beneficiary countries. 
What should be achieved? 

The analysis has identified three general objectives and five specific objectives to achieve. 
1)  To further contribute to poverty eradication by  
-  Expanding exports from beneficiary countries, especially those most in need, 
-  Enhancing export diversification of beneficiary countries. 
2)  To further contribute to sustainable development and good governance in beneficiary countries by: 
-  Strengthening GSP support to sustainable development in the beneficiary countries, 
- 
3)  To ensure EU economic interests are better protected in the functioning of the scheme by 
- 
What is the value added of action at the EU level (subsidiarity)?  

Increasing awareness about GSP opportunities and increasing transparency on the GSP+ monitoring. 

 further protecting competing EU industries. 

The  common  commercial  policy  is  listed  in  Article  3  of  the  TFEU  among  the  areas  of  exclusive 
competence of the Union. Pursuant to Art. 5(3) of the Treaty on European Union (TEU), the subsidiarity 
principle does not apply in areas of exclusive EU competence.  
B. Solutions 
What are the various options to achieve the objectives? Is there a preferred option or not? If not, 
why? 

We have identified 11 policy options and 19 sub-options, detailed in the enclosed table. The overall 
conclusion,  following  from  the  supporting  Study  and  the  Mid-term  Evaluation,  is  that  the  three  general 
objectives of the GSP are best served by pursuing continuity and maintaining the current GSP architecture 
with its three arrangements. The GSP framework should be updated by introducing technical changes to 
improve the GSP’s effectiveness and efficiency. 
Therefore, the preferred set of options are: 
-  Abolish the existing limited export competitiveness vulnerability criterion to ensure that all countries 

graduating from EBA could become eligible for GSP+ (Sub-option 3Ba) 

-  Extend the negative conditionality (i.e. the possibility to withdraw tariff preferences in cases of 

serious and systematic violations) to the international conventions on climate/environment and good 
governance listed in Annex VIII to the Regulation (Option 6B) 

-  Update the list of conventions in Annex VIII to the Regulation (Sub-option 8Bc) 
- 

Introduce additional steps after the formal launch of a withdrawal procedure (Sub-option 9Bb), 
shorten the duration of the procedure in exceptional circumstances (Sub-option 9Bd) and introduce 
withdrawal for migration (Sub-option 9Bc) 

-  Adopt practical measures to improve the monitoring of GSP implementation: provide a detailed 

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description of the monitoring process and clarify involvement of civil society (Option 10B). 

-  Expand the monitoring cycle to three years (Option 10D). 
For all remaining options, we broadly maintain the baseline. 
What are different stakeholders' views? Who supports which option?  

The  vast  majority  of  stakeholders  support  maintaining  the  current  GSP  framework,  including  the  three 
arrangements,  on  grounds  that  the  scheme  helps  eradicate  poverty,  create  jobs  and  support  economic 
growth, while contributing to sustainable development. A major overhaul of the GSP’s architecture is not 
needed but rather improving its efficiency and effectiveness. Stakeholders supported the idea of including 
environmental/climate  change  conventions  into  GSP  conditionality  as  well  as  introducing  additional 
measures to improve transparency and civil society involvement. EU industry is broadly supportive of the 
GSP, although some sectors (e.g. agri-food and textile producers) call for more protection of EU economic 
interests.  Civil  society  organisations  call  for  more  transparency  of  the  GSP  monitoring  process  and 
increasing the scheme’s impact on improving labour and environmental standards in beneficiary countries. 
C. Impacts of the preferred option 
What are the benefits of the preferred option (if any, otherwise of main ones)? 

The overall impact is limited as the Generalised Scheme of Preferences remains broadly stable, without 
introducing major changes and additional complexities for GSP beneficiaries, business, and civil society. 
Proposed changes aim to facilitate the poorest countries’ access to the EU market, in particular countries 
expected to graduate from LDC status, and their integration in international trade, to diversify their 
economies and promote sustainable economic growth, in particular through increased environmental 
protection. Continuing GSP with the targeted changes proposed will be a key encouraging signal from the 
EU to developing partners, maintaining a key platform to engage with beneficiary countries to bring about 
change consistent with the EU’s values agenda and policy coherence for development. 
What are the costs of the preferred option (if any, otherwise of main ones)?                                    

Additional costs (resources) are linked to increased monitoring of GSP beneficiaries’ compliance with the 
new international conventions (which will be added in view of the European Green Deal and migration-
related governance) and, after extension of negative conditionality, of the conventions on environment 
protection, climate change and good governance. 
What are the impacts on SMEs and competitiveness?  

The transparency measures improve understanding of how GSP operates in practice to the benefit of, in 
particular, SMEs. No negative impacts for SMEs are expected. 
Will there be significant impacts on national budgets and administrations?  
No significant impacts on national budgets and administrations are expected.   
Will there be other significant impacts?  
The proposed options will support the GSP and trade policy contribution to the European Green Deal (in 
particular implementation of the Paris Agreement on Climate Change), to the fight against forced labour 
and the worst forms of child labour, and migration-related policies. 
Proportionality?  

The principle of proportionality is satisfied in as much as a GSP regulation is the only appropriate type of 
action  that  the  Union  can  take  to  establish  unilateral  preferential  access  to  its  market  for  exports  from 
developing countries.  
D. Follow up 
When will the policy be reviewed?  
The Commission proposes that the new regulation runs for 10 years to ensure predictability, certainty for 
economic operators and to minimise the regulatory burden.  

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Annex: Description of the policy options 

Clusters 

Drivers 

Policy Options 

Cluster 1 

Arrangements 
and beneficiary 
countries  

Driver 1 (D1) 
Diminishing number of Standard 
GSP beneficiary countries 

Driver 2 (D2) 
Large and industrialised beneficiary 
countries with diversified export 
structure also benefit from GSP 

Driver 3 (D3) 
Unprecedented number of EBA 
beneficiary countries expected to 
graduate from LDC status and thus 
exit EBA  

Cluster 2 

Product 
coverage and 
graduation 
mechanism  

Driver 4 (D4) 
Product graduation 
mechanism is not targeted enough 
on competitive products and covers 
only Standard GSP 

Cluster 3 

Conditionality  

Driver 5 (D5) 
GSP product coverage does not 
adequately reflect the export 
potential of beneficiary countries 

Driver 6 (D6) 
Negative conditionality (Article 19) 
for all GSP arrangements is 
restricted to the 
core international conventions 
(human and labour rights) listed in 
Part A of Annex VIII to 
the GSP Regulation 
Driver No 7 (D7) 
Positive conditionality (Art. 15) is 
only provided for GSP+. Standard 
GSP and EBA beneficiaries are not 
required to ratify the conventions 
listed in Part A and B of Annex VIII 
to the Regulation 
Driver No 8 (D8) 
The list of international conventions 
in Annex VIII to the Regulation 

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Option 1B (O. 1B) 
Amend the three-tier structure of the GSP 
  Sub-option 1Ba: Discontinue all but EBA 
  Sub-option 1Bb: Discontinue the Standard 

GSP only 

Option 2B (O. 2B) 
Graduation from GSP of large and industrialised 
developing countries 

Option 3B (O. 3B) 
Ensure all EBA countries expected to graduate 
from LDC can transition to GSP+ by:  

  Sub-option 3Ba: changing the vulnerability 

criteria or  

  Sub-option 3Bb: granting a longer transition 

period for meeting the criteria 

Option 4B (O. 4B) 
Expand the application of the product graduation 
mechanism to GSP+ and EBA 

  Sub-option 4Ba: to rice and sugar 
  Sub-option 4Bb: to all agricultural products in 
Annex V and IX of the GSP Regulation 

Option 5B (O. 5B) 
Expand the product coverage for standard GSP 
and GSP+ 

  Sub-option 5Ba: to products that can help 

achieve environmental and climate protection 
goals 

  Sub-option 5Bb: to a number of industrial and 

agricultural semi-finished and finished 
products 

Option 6B (O. 6B) 
Expand negative conditionality to all conventions 
listed in Annex VIII to the Regulation  

Option 7B (O. 7B) 
Expand positive conditionality to the Standard GSP 
arrangement and EBA beneficiary countries 

Option 8B (O. 8B) 
Amend the list of international conventions in 

 
 
 
 
 
 
 
 
 
 
 
 
Clusters 

Drivers 
is not up to date 

Driver 9 (D9) 
Inefficient and insufficient response 
– through the GSP withdrawal 
mechanism  

Cluster 4 

Transparency 

Cluster 5  

Safeguards 

Driver 10 (D10) 
Insufficient information and 
transparency and lack of indicators 
for monitoring and evaluation of 
GSP impact 

Driver 11 (D11) 
Safeguard mechanism not 
responsive enough, in particular 
on sensitive products  
[and 
Driver No 4 (D4) 
Product graduation mechanism is 
not targeted enough on competitive 
products and covers only Standard 
GSP] 

Policy Options 
Annex VIII to the Regulation 
 Sub-option 8Ba: Remove conventions deemed 

no longer/less relevant  

 Sub-option 8Bb: Expand the list of conventions 

in Annex VIII to the Regulation 

 Sub-option 8Bc: Combine 8Ba and 8Bb 

Option 9B (O. 9B) 
Amend the mechanism for temporary withdrawal 
of preferences 

  Sub-option 9Ba: Introduce additional steps 
prior to the formal launch of a withdrawal 
procedure  

  Sub-option 9Bb: Introduce additional steps 
after the formal launch of a withdrawal 
procedure 

  Sub-option 9Bc: Introduce withdrawal for 
specific economic operators, and/or for 
violation of migration conventions 

  Sub-option 9Bd: Shorter urgency procedure in 

well qualified circumstances 

Option 10B (O. 10B) 
Adopt further practical measures to improve 
transparency 

Option 10 C (O. 10C) 
Extend and align the GSP monitoring cycle 

Option 11 B (O.11B) 
Expand the application of the automatic safeguard 
mechanism (Art. 29) to all agricultural products 

Option 11 C (O. 11C) 
Expand the application of the automatic safeguard 
mechanism (Article 29) to EBA beneficiary 
countries for different lists of products 
  Sub-option 11Ca: current list of products 

(Art.29) 

  Sub-option 11Cb: expand list to rice and sugar 
  Sub-option 11Cc: expand list to all agricultural 

products 

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