Preferential European Union import tariffs for developing countries

SUMMARY OF:

Regulation (EU) No 978/2012 applying a scheme of generalised tariff preferences

WHAT IS THE AIM OF THE REGULATION?

In 2012, the European Union (EU) agreed on new rules to refocus this scheme, which has been in place since 1971. These rules make the system more transparent and predictable for beneficiary countries, especially in view of the changed global trade patterns over the past decade. The scheme is now directed at those countries in greatest need.
The regulation does not include countries that already enjoy preferences under free trade agreements with the EU, or under autonomous arrangements with the EU (usually temporary, pending the conclusion of more comprehensive, longer-term agreements with the EU).

KEY POINTS

The EU’s scheme of generalised tariff preferences (GSP) allows developing countries to pay lower tariffs on their exports to the EU. This helps boost their economies.

Three strands of the scheme

Standard GSP. Tariffs for goods imported from a developing country are reduced or suspended. Exception: this does not apply if a country has been classified by the World Bank as a high or upper-middle income country for 3 consecutive years immediately before the EU updates the list of beneficiary countries.
GSP+ (incentive scheme). Even lower tariffs for countries that ratify and implement 27 specified international conventions covering human and labour rights, environment and good governance.
Everything but arms for least-developed countries. Full tariff and quota-free imports for all goods from the United Nations-defined least developed countries, except for arms.

Suspension of countries

The EU may temporarily suspend the lower tariffs for reasons such as:

violations of core principles in human and labour rights conventions;
unfair trading practices;
serious shortcomings in customs controls (e.g. export or transit of illegal drugs);
the national law of a GSP+ beneficiary country no longer incorporates the relevant conventions (or that law not being effectively implemented).

Discontinuation as countries develop

Some countries can be poor but still develop highly competitive export industries. Once this happens, they no longer need preferences to successfully penetrate EU markets.
The GSP scheme therefore withdraws preferences from countries with such competitive product sectors on the basis of a graduation mechanism.

More stable and predictable

The new GSP offers importers and exporters more stability and predictability, because it now lasts 10 years (as opposed to 3 years in the past).
Exporters know that – where changes are made in the beneficiary list – there are transition periods of at least 1 year. Countries now have the security of knowing that they can be removed from the beneficiary lists only if the United Nations lists them as high or upper-middle income countries 3 years in a row.

Temporary import restrictions

The EU may apply safeguard measures (temporary restrictions) if imports from beneficiary countries cause or threaten to cause serious difficulty to an EU producer. It may also apply surveillance measures for farm products. None of these measures have ever been taken in the history of the scheme.

List of beneficiary countries

Regulation (EU) No 978/2012 is being amended through implementing and delegated acts so as to update the list of the countries benefiting from tariff preferences under the GSP+. See latest consolidated version.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 20 November 2012.

BACKGROUND

For further information, see:

Generalised scheme of preferences (European Commission).

MAIN DOCUMENT

Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalised tariff preferences and repealing Council Regulation (EC) No 732/2008 (OJ L 303, 31.10.2012, pp. 1–82).

Successive amendments to Regulation (EU) No 978/2012 have been incorporated into the basic text. This consolidated version is for reference only.