EU revises GSP facility

The European Union (EU) has revised import preference scheme — popularly known as the Generalised System of Preferences (GSP) — for developing countries including Nepal with effect from January 1, 2014.

"Nepal will enjoy more opportunities to export as competitors exit the scheme," the EU said, adding that the new scheme will be focused on fewer beneficiaries — only 89 countries –– 49 LDCs in the 'Everything But Arms' scheme including Nepal, and 40 other low and lower-middle income partners — to ensure more impact on countries most in need.

Some 10 countries in Asia — Afghanistan, Bangladesh, Bhutan, Cambodia, Laos, Maldives (until end 2013 as they have exited the UN Least Developed Country list), Myanmar (preferences currently withdrawn), Nepal, Timor-Leste, Yemen — will get the facility.

"Due to GSP facility, EU has become one of Nepal's key export destinations in recent years," said Garment Association-Nepal's president Uday Raj Pandey. "The GSP facility has helped garment, carpet, pashmina and handicrafts sector to survive," he said, adding that Nepal has, however, not been able to take the maximum advantage of the facility.

Following an agreement with the Council of the European Union and European Parliament on Thursday, the scheme contains specific tariff preferences granted under GSP in the form of reduced or zero tariff rates and the final criteria for which developing countries will benefit.

By providing preferential access to the EU market, the scheme should assist developing countries in their efforts to reduce poverty and promote good governance and sustainable development by helping them generate additional revenue through international trade, which can then be reinvested for the benefit of their own development and, in addition, to diversify their economies, the EU added.

"The scheme’s tariff preferences should focus on helping developing countries having greater development, trade and financial needs."