CASE concludes a study on the EU’s Generalised System of Preferences trade arrangement for developing countries

As a partner in the consortium led by CARIS (University of Sussex), CASE has completed a mid‐term evaluation of the EU’s Generalised System of Preferences with a final report published by DG TRADE. GSP is a tradearrangement through which the EU provides preferential access to the EU market to 176 developing countries and territories in the form of reduced tariffs for their goods. The primary objective of the GSP is to contribute to the reduction of poverty and the promotion of sustainable development and good governance. The evaluation is an important part of the on‐going debate on the future of GSP and hence the overall shape of the EU’s support for the sustainable development of developing countries. The report considers the extent to which GSP regimes meet the needs of developing countries and puts forward recommendations for possible improvements. It does so by analysing a unique, very detailed dataset that has not been studied before as well as applying a range of other approaches. The study provides evidence that the EU‘s GSP preferences can be effective in increasing least‐developed countries’ exports and welfare. However, some structural features, such as the generally low level of EU most favoured nation (MFN) tariffs and the structure of least developed country (LDC) trade, inevitably constrain the effectiveness of the GSP regime. In view of this, the policy conclusions focus on measures to increase the effectiveness of the GSP scheme, including issues such as product coverage, further tariff reductions, maximising utilisation, rules of origin, and the role of graduation as well as general improvements to the GSP+ scheme. Alternative trade‐based policies are also considered, such as aid for trade policies, policies for non‐tariff measures and EU import subsidies. The report argues these are likely to be important factors when focusing on the trade and development agenda of those developing countries most in need.

Final Report: Mid-term Evaluation of the EU’s Generalised System of Preferences

For more information on GSP please consult the EC website.
For more information on the project see the CASE website.