The European Commission, European Council, and European Parliament have reached a formal agreement to update the Generalised Scheme of Preferences (GSP), the EU’s key sustainable trade mechanism for developing countries.
This agreement brings clarity and stability to the 65 beneficiary developing nations and to EU businesses that import goods from these markets—an important development amidst rising trade tariff pressures affecting vulnerable economies.
The revised GSP framework is designed to strengthen the EU’s commitment to sustainable development by enhancing critical elements of the scheme. It better addresses the changing economic and social challenges faced by partner countries and reinforces compliance with social, labor, environmental, and climate standards, ensuring that the scheme remains effective in supporting sustainable growth.
The new scheme will:
- Ensure a smoother transition for countries that are moving up in their development status by allowing them to retain preferential EU market access if they meet sustainability standards.
- Create more opportunities for low-income countries by lowering product graduation thresholds.
- Promote stronger human rights and labour standards by adding new conventions to the list of required compliance.
- Introduce the possibility of withdrawing benefits for environmental and climate violations.
- Improve monitoring, transparency, and civil society involvement, and introduce an urgent withdrawal procedure.
- Make beneficiary countries responsible for readmitting their own nationals in case of illegal migration issues.
The GSP Regulation is a flagship of EU trade and development policy. Through GSP, the EU unilaterally employs trade preferences to foster sustainable development and economic opportunities in beneficiary countries, maintaining its open approach towards vulnerable, developing economies. Moreover, the EU unilaterally opens its markets to developing and least developed countries, thus supporting poverty eradication, sustainable development, and the integration of these countries in the global economy.
The new EU Generalised Scheme of Preferences was proposed in 2021. The trade instrument was in place for over 50 years. It covers 65 countries, which are among the poorest in the world, and almost 2 billion people. In 2024, total imports into the EU under GSP amounted to EUR 60 billion; 51% of these were imports from Least Developed Countries benefitting from the Everything but Arms arrangement.
