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Press Release
GSP: a new trade instrument to encourage sustainable development

Date of release : 23-06-2005

Policy area : General Affairs and External Relations

The Luxembourg Presidency concluded a political agreement for the adoption by the Council on Monday, 27 June of a new system of trade preferences for 2006 -2008. The system will focus more on countries most in need, including those countries affected by the Tsunami, which will be simpler and will encourage sustainable development.

"The Generalised System of Preferences is a key instrument to support developing countries to reduce poverty by encouraging them to generate revenue through international trade. This instrument generates an annual trade flow worth 50 billions of euro from all developing countries into the EU", stated Jean Asselborn, President of the Council of the European Union.

The new Generalised System of Preferences will enter into force on 1 January 2006 and will allow beneficiary countries and economic operators to act in an environment that is stable and predictable. This system is simpler as it reduces the existing provisions from 5 to 3 and it has a wider scope as the list of products covered by the new regime includes nearly 300 additional products.

The GSP consists first of all of a general regime which grants a reduction of 3.5% on regular customs duties for sensitive products and a duty free access for non-sensitive products. Secondly, it includes the "Everything but Arms" initiative which extends duty and quota-free access to the EU market for the world’s 50 poorest countries.

Thirdly, the new regulation sets up a GSP Plus (GSP+) scheme to encourage sustainable development and good government while providing specific benefits to vulnerable countries (which represent less than 1% of EU imports under GSP) who agree to implement the main international conventions on social rights, environmental protection and governance.  This regime will come into force on 1 July 2005 and will replace the current special "drugs" regime.

"By speeding up access to the European market and reducing customs duties for developing countries, the EU has shown its unique generosity among industrialised nations to strengthen the integration of these countries into world trade", concluded Minster Jean Asselborn.

This page was last modified on : 23-06-2005

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