Generalized System of Preferences- GSP
Posted by Ripon Abu Hasnat on Friday, June 13, 2014 | 0 comments
The
Generalized System of Preferences, or GSP, is a formal system of exemption from
the more general rules of the World Trade Organization (WTO), (formerly, the
General Agreement on Tariffs and Trade or GATT). Specifically, it's a system of
exemption from the most favored nation principle (MFN) that obliges WTO member
countries to treat the imports of all other WTO member countries no worse than
they treat the imports of their "most favored" trading partner. In
essence, MFN requires WTO member countries to treat imports coming from all
other WTO member countries equally, that is, by imposing equal tariffs on them,
etc. GSP exempts WTO member countries from MFN for the purpose of lowering
tariffs for the least developed countries, without also lowering tariffs for
rich countries.
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