2. Characterizing the European Unio

2. Characterizing the European Union’s GSP
The GSPs is composed of trade preferences granted by the developed countries to
developing world en masse on a non-reciprocal basis, i.e. without market access
concessions in return. It was first proposed in 1968 at the UNCTAD during the Kennedy
Round to encourage the participation of developing countries in GATT, and was
adopted at UNCTAD II in New Delhi. The main principle of the GSP is the provision of
better-than-MFN tariff preferences to imports from developing countries. For instance,
the EU’s GSP scheme sets a zero tariff on a number of imports from GSP beneficiary
countries while other countries face higher MFN tariffs. The GSP promised through
“trade rather than aid” to increase the exports and purchasing power of developing
countries in the short run and to diversify LDC economies in the longer run by
encouraging the exports of manufactured and semi-manufactured products.