GSP (Generalized System of Preferences) Rate

The Generalized System of Preferences (GSP) rate is a preferential tariff rate unilaterally granted by developed countries to developing countries or least developed countries. It is a non-reciprocal tariff preference arrangement. Its legal basis is the GSP principle advocated by UNCTAD, and each donor country (such as the EU, the UK, Japan, Canada, etc.) formulates its own GSP scheme. Usage scenarios: When exporting to a donor country, exporters need to provide a certificate of origin (such as Form A) and comply with rules of origin to apply for the GSP rate, which is usually lower than the Most-Favored-Nation (MFN) rate, sometimes even zero. Notes: GSP is unilateral and time-limited; donor countries may adjust or cancel it at any time. Product coverage is limited, and sensitive goods are often excluded. There is a graduation mechanism: when a beneficiary country's product becomes sufficiently competitive, it is 'graduated' and no longer enjoys preferences. Difference from MFN rate: MFN applies to WTO members, while GSP applies only to specific developing countries and requires active application and compliance with origin requirements. Difference from FTA rate: GSP is a non-reciprocal, one-way preference, while FTA is reciprocal. Foreign trade practitioners should monitor the latest schemes of donor countries, ensure documentation compliance, and avoid losing preferences due to origin non-compliance.