The Presidency of the Council of the European Union and negotiators from the European Parliament have reached a provisional agreement on updating the Generalized System of Preferences (GSP), which grants developing countries trade advantages to access the European single market.
The new framework will be implemented on January 1, 2027, strengthening the link between trade benefits and commitments to human rights, environmental protection, and good governance. It also introduces a new condition concerning cooperation on migration issues and the readmission of illegally residing citizens in EU member states.
Danish Foreign Minister Løkke Rasmussen confirmed that the agreement enhances Europe's support for developing countries through preferential access to the single market, emphasizing the need to tie these benefits to respect for fundamental rights, environmental standards, and sound governance, as well as cooperation on the readmission of illegal citizens for the first time.
The revised framework maintains the core components of the current system while introducing extensive improvements. These include expanding the international agreements that beneficiary countries must adhere to and allowing for the withdrawal of preferences in the event of serious violations of human rights or the environment. It also imposes similar measures for failing to respect the fundamental principles of climate agreements.
The new framework also allows for the suspension of trade benefits for countries that do not cooperate with the EU on migration and readmission. The European Commission is tasked with monitoring compliance and keeping the Parliament and the Council informed of any decisions in this regard. Least developed countries whose classification will be revised in the next decade will benefit from a flexible transition to gain support from the preference system, provided they adhere to strict sustainability standards. The threshold at which preferences are suspended for a given sector is lowered from 57% to 47% to ensure that support is directed towards the most competitively needed products.
The agreement includes mechanisms to protect European producers, the most prominent of which is an automatic safeguard for rice imports through a tariff rate quota system that imposes the Most Favored Nation (MFN) duty on quantities exceeding historical levels, alongside special safeguard measures for textiles and ethanol imports under the GSP.
As mentioned, the new framework allows for the suspension of trade benefits for countries that do not cooperate with the European Union on migration and readmission issues.
