Executive summary

• Author: Development Solutions Europe Limited, Directorate-General for Trade (European Commission)
• Pages: 7-11

EUROPEAN COMMISSION

7

Executive summary

In 1971, the European Community first introduced a Generalised Scheme of Preferences

(GSP) following a resolution of the United Nations Conference on Trade and Development

(UNCTAD) to create a system of preferences to support developing countries.

Regulation (EU) No. 978/2012 (‘the GSP Regulation’) introduced reforms to th e scheme,

including on the number of beneficiary countries, product coverage, mechanisms for

graduation and temporary wi thdrawal an d the Special Incentive Arrangement for

Sustainable Development and Good Governance (‘GSP+’). The objectives of the GSP

Regulation were threefold: (i) to contribute to poverty eradication by expanding exports

from countries most in need; (ii) to promote sustainable d evelopment and good

governance; and (i ii) to ensure a better safeguard for the EU ’s financi al and economic

interest.

The GSP R egulation entered i nto force on 1 January 2014 for a period of ten years. The

scheme offers three different preference arrangements:

1. A general arrangement (‘Standard GSP’);

2. A Special Incentive Arrangement f or Sustainable Development and Good

Governance (‘GSP+’) for vulnerable countries; and

3. An Everything But Arms (‘EBA’) arrang ement for Least Developed Countries

(LDCs).

For the present Mid-Term Evaluation of the GSP Regulation, both quantitative and

qualitative desk research and analysis have been employed to assess the economic,

social, environmental, and human rights impact of the reformed scheme. The Project

Team has conducted an economic analysis of the scheme using the most up-to-date and

detailed economic, trade and tariff data provided by the European Commission.

Additionally, the Project Team has used indicators, where available, to analyse the

social, environmental and human rights impact in the beneficiary countries.

To complement the data analysis and li terature review and to raise awareness of the

scheme among relevant stakeholders, a comprehensive and inclusive stakeholder

consultation process has been implemented.

Key findings

Positive economic impacts of the GSP Regulation can already be witnessed. The main

economic findings can be summarised as follows:

Export Growth

o For the group of countries that were eligible for GSP preferences throughout the

period 2011-2016, there has been evidence of an increase in EU imports originating

from countries under th e three arrangements post GSP-reform. This was parti cularly

the case for the 49 EBA countries. This fi nding is consistent with the objectives of

the GSP reform to target export expansion esp ecially amongst the developi ng

countries most in need and most vulnerable. While there has been a small absolute

increase in the exports of the 23 Standard GSP countries since 20 14, their three

year average annual post-reform imports slightly declined compared wi th pre-reform

period (2011-2013). It is noted that the increases of imports under GSP were

realized in a context of a flat EU import demand around EUR 1.55 trillion per annum.

o The main product sections imported under the GSP are textiles, footwear, and

machinery and mechanical appliances. Between 2014 and 2016, textile imports grew

by 24.5 per cent, compared to 6.5 per cent between 2011 and 2013.

Erosion of Preference Margins