The European Union has taken a significant step in its trade policy with the approval of the renewed Generalised Scheme of Preferences (GSP). Following the European Parliament’s vote, the new framework will enter into force on 1 January 2027.
What is the GSP?
The GSP is a key EU trade instrument that grants developing countries preferential access to the EU market through reduced or zero tariffs. Under the new scheme, 65 countries will benefit over the next decade.
Stronger focus on sustainability and rights
A major update is the closer link between trade benefits and compliance with international standards. Beneficiary countries must adhere to an expanded list of international conventions covering:
- Human rights
- Labour rights
- Climate and environment
- Good governance
An accelerated withdrawal mechanism will also allow the EU to suspend preferences in cases of serious and systemic violations.
Everything But Arms continues
The “Everything But Arms” (EBA) initiative remains a cornerstone of the system. It provides full duty-free access to the EU market for all goods, except arms and ammunition, from Least Developed Countries (LDCs). The scheme will now continue indefinitely, ensuring long-term stability.
Increased transparency and monitoring
The European Commission introduces enhanced monitoring and greater transparency, strengthening enforcement and credibility of the scheme.
Safeguards for EU markets
The updated GSP includes an automatic safeguard mechanism for rice imports. If imports rise sharply above historical averages, preferential tariffs may be temporarily suspended and tariff-rate quotas applied to prevent market disruption.
What does this mean for businesses?
For EU companies, the new GSP presents both opportunities and challenges:
- Improved sourcing opportunities from developing countries
- Increased emphasis on due diligence and compliance
- Potential impact on pricing and supply dynamics
Businesses are advised to review their supply chains and sourcing strategies well ahead of 2027.
The renewed GSP highlights the EU’s ambition to use trade as a driver for sustainable development, while reinforcing accountability across global value chains.
