In the pantheon of obscure international trade terminology, the “generalised system of preferences,” or GSP, has a special place. GSP refers to an approach that has been adopted by nearly all developed countries for roughly the last half-century to offer incentives for economic reform in developing countries through lower tariffs. Each developed country has customised its own GSP programme to identify qualification criteria it deems important in economic reform, although all ensure that their programmes are constructed to avoid harm to domestic production. In short, it is the oldest and most far-reaching approach to “aid for trade” in the modern multilateral trading system, embodied in the World Trade Organization.
Renewing GSP
What is unique about the GSP programme in the U.S. is that its authorising legislation periodically expires until Congress sees fit to renew the programme. New legislation is never an easy proposition, especially in a polarised environment, making bipartisan legislation a herculean endeavour. That is the case with GSP now. The U.S. programme expired in 2020 and despite repeated assurances of bipartisan support, it remains in limbo.
