ABSTRACT
When, in 1971 the EEC introduced its Generalized System of Preferences in advance of any non-member Western industrialized country, this was heralded as a breakthrough in economic relations between the developed and the developing world. The origin of the GSP lay in the UNCTAD Conference of 1964, with Raul Prebisch’s proposal of a unified system whereby the industrialized countries, without requiring reciprocal action, would admit, free of import duties, all developing country exports of manufactures and semi-manufactures. This major departure from the most-favoured-nation (mfn) or non-discrimination principle was defended on the grounds that the GSP would bring about a major advance in the industrialization process in the developing countries. The economic burden was to be shared by the importing developed country through loss of tariff revenue and reduced domestic output, and by other developed countries who would experience a decline in their exports.
