4. GSP
GSP is a system of tariff preferences in favor of
developing countries brought into effect in 1972,
as part of a concerted international effort by
industrialized countries to assist developing
countries to expand their exports and thus
increase their foreign exchange earnings.
5. History of GSP
The idea of tariff preferences for developing
countries was the subject of considerable
discussion within the United Nations Conference
on Trade and Development (UNCTAD) in the
1960s. Among other concerns, developing
countries claimed that MFN was creating a
disincentive for richer countries to reduce and
eliminate tariffs and other trade restrictions with
enough speed to benefit developing countries.
6. In 1971, the GATT followed the lead of UNCTAD and
enacted two waivers to the MFN that permitted tariff
preferences to be granted to developing country goods.
Both these waivers were limited in time to ten years. In
1979, the GATT established a permanent exemption to
the MFN obligation by way of the enabling clause. This
exemption allowed contracting parties to the GATT
(the equivalent of today's WTO members) to establish
systems of trade preferences for other countries, with
the caveat that these systems had to be "generalized,
non-discriminatory and non-reciprocal' with respect
to the countries they benefited (so-called "beneficiary"
countries). Countries were not supposed to set up GSP
programs that benefited just a few of their "friends.'
7. Duty-free and quota-free
market access for LDCs
In the 2005 Hong Kong Ministerial Conference, members
adopted a Decision on Measures in Favor of Least Developed
Countries where developed countries, and developing-country
members declaring themselves in a position to do so, agreed
to implement duty-free and quota-free (DFQF) market access
for products originating from LDCs.
Since the adoption of the Hong Kong Decision, members have
made significant progress towards the goal of providing DFQF
market access on a lasting basis for all products originating
from all LDCs. Nearly all developed-country members provide
either full or nearly full DFQF market access, and a number of
developing-country members also grant a significant degree of
DFQF market access to LDC products.
8.
At the December 2013 Bali Conference, Ministers will consider
a draft decision that would further encourage developed-
country members to improve their existing DFQF coverage for
products originating from LDCs, so as to provide greater
market access to LDCs. The text also encourages developing-
country members, declaring themselves in a position to do so,
to provide DFQF market access for products originating from
LDCs, or to improve their existing DFQF coverage for such
products. The draft decision instructs members to report on
the implementation of this decision at the next WTO
Ministerial Conference in 2015.
The draft decision represents a political commitment of WTO
members to assist LDCs to integrate into the multilateral
trading system. It also calls on WTO members to enhance the
transparency of the duty-free and quota-free schemes. WTO
members would notify their DFQF schemes to the WTO, and
the relevant WTO committee would annually review the steps
taken to provide the duty-free and quota-free market access to
LDCs.
9. To aid in its review, the WTO secretariat would
prepare a report on Members’ duty-free and quota-free
market access for LDCs at the tariff line level in close
coordination with Members based on their
notifications.