What is Generalized System of Preferences?


The Generalized System of Preferences (GSP) is a generalized, non-reciprocal and nondiscriminatory preference scheme beneficial to developing countries (also known as preference receiving countries or beneficiary countries) extended by developed countries

(also known as preference giving countries or donor countries).


It involves reduced MFN Tariffs or duty-free entry of eligible products exported by beneficiary countries to the markets of donor countries. The basic principle behind the GSP program worldwide is to provide developing countries with unilateral preferential market access to developed-country markets in order to spur economic growth in poorer countries. The main 


objectives of granting trade preferences to developing countries are to:

• Enhance their export earnings;

• Promote industrialization, and

• Encourage the diversification of their economies.


Countries that extend GSP benefits:

Presently, 29 preference giving countries are extending GSP concession through their respective Schemes. These are Australia, Canada, Czech Republic, European Union, Japan, New Zealand, Norway, Bulgaria, Hungary, Poland, the Russian Federation, Slovakia, Switzerland, and the USA.

It is to be noted that the GSP schemes offered by the various donor countries and their rules of origin differ fundamentally.


Goods complying with the conditions of the GSP of the USA, for example, will not necessarily comply with the EU GSP. Bangladesh as a Least Developed Country (LDC) is enjoying duty free market access or reduced tariff rate facilities to export to various developed and developing countries in the world. This facility is enhanced and privileged by the membership of the World Trade Organization (WTO).


Besides, Bangladesh is a member of different regional trade blocs. Thus the country enjoys duty-free or reduced tariff rate access to other member countries. WTO members always recognize the necessity of providing Duty-Free Quota Free (DFQF) market access to LDCs. It was decided in the 6th WTO Ministerial Conference held in Hong Kong in 2005.

 

All developed countries will provide DFQF market access to LDCs for at least 97% tariff lines. Bangladesh is getting DFQF market access to different markets. This is the first legally binding decision on DFQF for LDCs.

Bangladesh is getting GSP facilities from 38 countries; European Union – 28 countries. Others - Australia, Belarus, Canada, Liechtenstein, Japan, New Zealand, Norway, Russian Federation, Switzerland, and Turkey – 10 countries.



Category and Tags
More stories by
First Bangladeshi Goldman Sachs partner Ryad Yousuf

Many of the expatriate Bangladeshis are making their mark in the Western world. The latest addition to that trend is Ryad Yousuf, a Bangladeshi living in London. He is the first Bangladeshi to be promoted as a partne...

Twitter's 'Blue Tick' service launched for $8 a month

Finally, Elon Musk, the world's richest man, launched Twitter's 'Blue Tick' service for $8 a month ($7.99) for customers. Elon Musk recently bought the ownership of the social networking site Twitter and took the lea...

Windows 11 and Android are lifting this cool component from macOS and iPhones

There will soon be a new Windows 11 preview build with an intriguing new feature. Through your mobile hotspot, you'll be able to connect directly to your Android phone from your computer.According to Windows Central,...

Google is bringing new app icons for smartphones

Google constantly brings updates to their stock apps through various updates. But till now the tech giant hasn't made any changes to its app icon. A few months ago, Google made several changes to the Play Store app icon. This time, the company owned

Japanese journalist sentenced to three more years in Myanmar

Japanese journalist Toru Kubot Photo: Reuters file photoJapanese journalist Toru Kubota, who was arrested while filming anti-coup protests in Myanma...

Follow Business Habit on Facebook, Twitter