The Generalized System of Preferences (GSP) is a preferential tariff system extended by developed countries to developing and emerging-market countries to promote economic growth and enhance their export capabilities. It provides for reduced MFN Tariffs or dutyfree entry of eligible products exported by beneficiary countries to the markets of preference-granting countries. Armenia currently enjoys GSP beneficiary status with Canada, Japan, Norway, Switzerland, and the United States. Since 2009, Armenia has also been included in the list of countries granted GSP+ by the European Union.

Canada’s GSP product list includes specific agricultural and industrial goods for which developing countries enjoy a comparative advantage. However, this list excludes several sensitive items, such as certain textiles, footwear, products of the chemical, plastic and allied industries, specialty steels and electron tubes.

Japan grants GSP treatment for selected agricultural and fishery products (337 items) and for selected industrial products (3,141 items). All industrial products are in principle given duty-free treatment, while GSP rates on some sensitive items are 20, 40, 60 or 80% of Most Favored Nation rates.

Norway’s tariff duties are zero on an MFN basis for almost all industrial goods. However, tariffs remain, in the range of 5-15% for a few textile products, and there is an exception list for these products in Norway’s GSP.

The Swiss GSP covers all industrial goods and many agricultural products, and provides preferential treatment in the form of reduction of, or exemption from, duties. Industrial products are admitted duty-free, with the exception of textiles and clothing, for which preferential reductions of 50% of the normal rate are granted, and a few other products for which specific preferential reductions are granted.

Products that are eligible for duty-free treatment under the US GSP include most manufactured items; many types of chemicals, minerals and building stone; jewelry; many types of carpets; and certain agricultural and fishery products. Among the products that are not eligible for GSP duty-free treatment are most textiles and apparel; watches; and most footwear, handbags and luggage products.

Armenia benefited from the EU’s Generalized System of Preferences in 2006-2008, which provided preferential access to the EU market in the form of zero duties on 3,300 products and reduced tariffs for another 3,900 goods. In 2008 the European Commission adopted a resolution which provides Armenia and 15 other countries with special incentives for sustainable development and good governance (GSP+) under the EU GSP Regulation for 2009-2011, which was extended until December 2013. This allows Armenia to export to the EU 7,200 products without any customs duties.

In order to keep these enhanced preferences in place over the lifetime of the GSP Regulation, Armenia effectively implements the 27 core international conventions on sustainable development and good governance listed in the Regulation.

 

*Acknowledgement – this content is provided from Investment Guide Armenia 2013 upon approval. – Full report here