Generalised system of Preference
What is GSP ?
A developed country provide some benefit to developing country, in terms of custom duty or tariff. It is us. Trade program designed to promote economic growth in the developing world by providing preferential-duty –free entry for up to 48,000 products from 129 designated beneficiary countries and territories.
It instituted on Jan. 1,1974,by trade act of 1974. Ultimately by this the export will increase of developed country, and promote competitive-ness of product.
UNCTAD:- GSP discussed in UNCTAD. 1968-New delhi – 2 Round and taken concrete measures to implement GSP.
They do have sealing period 10 years. During Tokyo round of multilateral negotiations-1979, 10 years of sealing period is with drawn.
How the product identified ?
The base of particular product identified is
Rules of origin (ROO)
Origin criteria:- Whenever the developing country exports the product to developed country, that should be product in beneficiary economy.
Transport Condition:- Modi, or transport that is level.
Advantages:- 2 Perspective
Done Country :- 1. Cheaper import/ cost effective import.
Final good that are manufactured by doner country it can be export to other country.
Beneficiary Country:- 1. Promotion of export
2.Lead to increase forex reserve
3 .Employment generation
Relation between USA or India under ambit of GSP
17.54b$ 20.77b$:- Total GSP import
4.58 b$ 5.58b$:- Export form India under GSP
Data shows that certain export is doubling after passing two years 13 sector which are under GSP certain engineering product , chemical, textile etc.
; HARLEY DEVIDSON CASE
Later reduced to 50%
It is reciprocal tax.
If that is true india is a tariff king
INDIA-150% AVG. tariff 13.8% on goods 10.7%
SOUTH KOREA- 807%
They are protecting their domestic market.