Adopted at the second UNCTAD Conference in New Delhi in 1968, the Generalised System of Preferences (GSP) is an umbrella that comprises the bulk of preferential schemes granted by industrialised nations. In 2009 there were 11 national GSP schemes notified to the UNCTAD secretariat (these GSP schemes are granted by Australia, Belarus, Canada, the European Community, Japan, New Zealand, Norway, the Russian Federation, Switzerland, Turkey and the United States of America). Though the GSP is a generalised, non-reciprocal system of preferences, it nonetheless allows special measures in favour of the least advanced among the developing countries. Thus, countries may grant MFN tariff rates to GATT Contracting Parties, GSP tariffs to a given group of developing countries, and a special GSP (SGSP) tariff to less developed countries. The tariff equation in mathematical terms would thus be: MFNt > GSPt > SGSPt.
The U.S. Generalized System of Preferences (GSP), a program designed to promote economic growth in the developing world, provides preferential duty-free entry for about 4,900 products from 132 designated beneficiary countries and territories. The GSP program was instituted on Jan. 1, 1976, and authorized under the Trade Act of 1974 for a 10-year period. The GSP Program is currently authorized through December 31, 2009.
Canada grants unilateral preferential tariff treatment under the General Preferential Tariff (GPT), the Least-Developed Country Tariff (LDCT), and the Commonwealth Caribbean Country Tariff (CARIBCAN). The GPT provides tariff preferences for most developing countries. Dairy products, poultry, eggs, refined sugar, and most textiles, clothing, and footwear are not eligible for preferential tariff treatment. Around 67% of tariff lines benefit from duty-free treatment under the GPT. The simple average tariff under the GPT was 5.2% in 2006, roughly the same as in 2002. The GPT has been extended until June 2014. The LDCT provides duty-free access for imports from the least developed countries (including Haiti), as defined by the United Nations, except Myanmar. Following the expansion of the LDCT in January 2003, close to 99% of tariff lines are eligible for duty-free treatment. The remaining 1% is subject to average tariffs of around 224% and covers out-of-quota tariffs on dairy, poultry, and egg products, which have been excluded from preferential treatment under the LDCT. The simple average tariff under the LDCT was 2.5% in 2006, down from 4.1% in 2002. The LDCT has been extended until June 2014.
For more information:
Handbooks on GSP Schemes
UNCTAD List of Beneficiary Countries
Information on US GSP