Generalized System of Preferences Rules

GSP Rules are unilateral. This means that the donor country set terms and conditions that the beneficiaries will meet in order to benefit from its scheme.
In developing their individual GSP Schemes Donor Countries should ensure that the GSP Rules formulated are:
- Generalized;
- Non-discriminatory; and
- Non-reciprocal
The rules should also adhere to all the other principles that guide the development and application of Rules of Origin.
The programs of most GSP-granting countries place certain conditions on the nonreciprocal preferences. These include:
- Excluding certain countries
- Determining specific product coverage;
- Determining rules of origin governing the preference;
- Determining the duration of the scheme;
- Reducing preferential margins accruing to developing countries by continuing to lower tariffs as a result of multilateral, bilateral, and regional negotiations;
- Preventing the concentration of benefits among a few countries;
- Including safeguard mechanisms or “escape” clauses to protect import-sensitive industries; and
- Placing caps on the volume of duty-free trade entering under their program.

Student Activities

Activity 1
- Visit https://unctad.org/topic/trade-agreements/generalized-system-of-preferences
- Download and read the following documents:
- Quantifying the Benefits Obtained by Developing Countries from the Generalized System of Preferences (UNCTAD/ITCD/TSB/Misc.52)
- Trade Preferences for Least Developed Countries: An Early Assessment of Benefits and Possible Improvements (UNCTAD/ITCD/TSB/2003/8)
Required:
- Provide a summary of the benefits of the GSP to the developed countries
- Discuss the challenges faced in the implementation of the GSP

Activity 2

Visit https://unctad.org/topic/trade-agreements/generalized-system-of-preferences
Download and read the following documents:
Generalized System of Preferences: List of Beneficiaries (UNCTAD/ITCD/TSB/Misc.62/Rev.6)

Required:

Identify the Generalized System of Preferences Schemes that each of the following EAC Members participate in: Burundi, Kenya , Uganda, Tanzania, Rwanda & South Sudan

Explain the benefits of the GSP Schemes
Discuss the rules of the GSP Schemes
Discuss the challenges developing countries face in participating in multiple GSPs