GSP, an abbreviation for Generalized System of Preferences, refers to a trade program established by some developed countries to promote economic growth and development in eligible developing countries. It is a preferential trade arrangement intended to assist countries by granting them reduced or zero tariff rates on their exported goods.
The Generalized System of Preferences provides developing countries with increased market access to developed countries' markets, enabling them to compete more effectively. It is designed to encourage economic diversification, industrialization, and export-oriented growth in developing nations.
Under GSP, eligible products from the designated beneficiary countries are granted reduced tariff rates when imported into the participating developed countries. The program includes a specific set of criteria and conditions that countries must adhere to in order to benefit from these preferential trade arrangements. Such criteria may address issues like human rights standards, labor conditions, environmental sustainability, and intellectual property protection.
By implementing the GSP program, developing countries are given the opportunity to expand their export sectors and increase their foreign revenue, which can contribute to poverty reduction and economic development. Simultaneously, it enables developed countries to access a wider range of products at more competitive prices, benefitting their consumers and industries.
Overall, the Generalized System of Preferences plays a vital role in promoting international trade and fostering mutually beneficial relationships between developed and developing nations, facilitating economic growth and development for all involved parties.
