The European Commission has approved a legislative proposal for a new generalized system of preferences (GSP) for the European Union (EU) for the years 2024-2034. The former suggested that some characteristics be improved in order to better react to the changing requirements and problems of GSP countries, as well as to strengthen the scheme’s social, labor, environmental, and climate dimensions.
The GSP rule is a unilateral trade mechanism that eliminates or cuts import tariffs on items from vulnerable low-income countries entering the EU, thereby promoting poverty eradication, sustainable development, and participation in the global economy.
The EU’s GSP, according to the Commission’s proposal, will be more focused on eliminating poverty and expanding the export potential for low-income nations. In a press statement, the Commission stated that it intends to incentivize sustainable economic growth in low-income countries and provides new opportunities for participation in environmental and good governance challenges.
The EU’s ability to employ trade preferences to provide economic opportunities and enhance sustainable development is strengthened under the new GSP framework. In the event of substantial and persistent infractions, the modernized framework strengthens the grounds for the revocation of EU GSP benefits.
The plan includes environmental and good governance conventions in addition to the fundamental human rights and labor accords currently covered.
The new proposal improves on the current model by assuring a smooth transition for all nations expected to graduate from LDC designation in the coming decade. If they commit to excellent sustainability standards, firms can apply for the special incentive arrangement for sustainable development and good governance (GSP+), which allows them to keep their considerable tariff preferences for access to the EU market.
The new proposal adds two more human rights instruments on the rights of people with disabilities and the rights of children, two labor rights conventions on labor inspections and tripartite dialogue, and one governance convention on transnational organized crime to the list of international conventions that must be followed.
It also suggests establishing a well-defined structure for current GSP+ beneficiaries to adjust to the new standards, including a sufficient transition period and the submission of implementation plans.