chapter  7
14 Pages

Withdrawal of trade privileges under the Generalized System of Preferences

The granting of trade preferences to third countries by the EU in the form of the Generalized System of Preferences (GSP) constitutes a unilaterally granted benefit. Trade preferences granted to developing countries represent an exception of the WTO’s Most-Favoured Nations (MFN) principle, which stipulates that members are not allowed to discriminate between trading partners. An exceptional clause allows for a more favourable treatment for imports stemming from developing countries. Tariff preferences additional to the WTO’s MFN are granted by a number of industrialised countries. However, only the EU and the US link their GSP programmes to conditions (Bartels 2005:68). While the suspension of trade preferences is not considered a sanction by the EU, its study as a form of sanction has become established practice in political science scholarship (Hufbauer and Oegg 2003, Orbie and Tortell 2009). Table 7.1 displays the only two cases of GSP suspension so far.