Home / News / UK Generalised Scheme of Preferences (GSP) launches from 1 January 2021

UK Generalised Scheme of Preferences (GSP) launches from 1 January 2021

10/11/2020

The UK’s Generalised Scheme of Preferences (GSP) will cover all the same countries that are currently eligible for trade preferences under the EU’s GSP after the end of the transition period, the UK Government has said.

The trade preference scheme will cover any eligible countries that do not have their existing trade agreements transitioned into a new agreement with the UK

The UK imported approximately £8 billion-worth of textiles and apparel products from eligible countries last year. This accounted for 30% of all textile and apparel imports into the UK.

The UK Government said it is planning on improving the scheme to better support developing countries and more details will be announced in 2021.

The UK GSP will have three frameworks:

  • Least Developed Countries Framework
  • General Framework
  • Enhanced Framework

These frameworks replicate the market access provided by the EU’s GSP.

Least developed countries framework

This framework is for countries that the UN classifies as Least Developed Countries. Imports from these countries have quota-free access and nil rates of import duty on all goods other than arms and ammunition.

Countries in the least developed countries framework include Bangladesh, Ethiopia, Gambia, Haiti, Laos, Myanmar and Nepal. The full list can be found here.

General Framework

This framework is for countries that the World Bank classifies as low-income and lower-middle income countries.

Imports from these countries have reduced rates of import duty on certain goods. Download the UK Generalised Scheme of Preferences (ODS, 553KB) to check which goods are eligible.

Countries in the general framework include India, Indonesia and Nigeria.

Countries including Algeria, Egypt, Georgia, Ghana, Guatemala, Honduras, Kenya, Morocco, Tunisia and Vietnam are in the in the process of reproducing the effects of an EU trade agreement. They will receive GSP market access if they do not implement a trade agreement with the UK before 1 January 2021. The full list can be found here.

Enhanced Framework

This framework is for countries that are:

  • classified by the World Bank as low-income and lower-middle income countries
  • economically vulnerable due to a lack of export diversification and a low level of integration with the international trading system

They must also implement 27 conventions relating to:

  • human and labour rights
  • the environment
  • good governance

Imports from these countries have a nil rate of import duty on certain goods. Download the UK Generalised Scheme of Preferences (ODS, 553KB) to check which goods are eligible.

Countries in the enhanced framework include Armenia, Bolivia, Mongolia, Pakistan, the Philippines and Sri Lanka.

The full list of countries in the three frameworks, plus details on rules of origin, cumulation and evidence requirements can be found here.

When a country no longer meets the relevant eligibility requirements it will be removed from the relevant GSP framework (known as country graduation). The UK will provide a graduation period of at least three years before removing a country from the relevant framework. A country will enter another GSP framework if it meets the relevant requirements.

Trade arrangement suspension

GSP rates may be suspended for countries once they implement a new trade agreement with the UK, which provides them with equivalent or better preferential market access than the GSP. Find out which countries have agreed a trade agreement with the UK.

Goods graduation

Preferential rates of import duty may be suspended on a specific product group that is already highly competitive without trade preferences. This is known as goods graduation.

The UK’s first list of graduated goods replicates the EU’s current list of graduated goods until the end of 2022. The next list of graduated goods will take effect in 2023. It will be reviewed every three years and published here.

Find out which goods will be graduated under the UK GSP. This list will apply until the end of 2022.

READ MORE HERE

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