GSP Certificates and the generalised system of preferences have been around for a long time. Tracing the original discussions on preferential trade for developing countries goes right back to 1960. They have been deemed a success and has helped developing countries compete into major markets throughout the world. They are certainly useful in ensuring that duties are minimised out of specific regions to help stimulate trade. Not everybody sees it that way.
Have GSP Certificates achieved there goal
Broadly the answer to this questions has to be a yes. Developing countries have benefitted from trade with major markets around the world due to the Generalised System of Preferences system. Criticism of the system though centres around what is covered. not all products or countries qualify for GSP. The United States, for instance, has an exclusion on Vietnam as a communist country. One strong argument is that the design of the GSP system benefits richer developing countries. Mexico, Taiwan, Hong Kong and even Singapore have benefitted. When you look at Haiti, Nepal and Sub-Saharan Africa the same cannot be said. Indeed rival schemes to the GSP system have popped up, the Africa Growth and Opportunity Act for instance.
Developed countries have built into the GSP system some safety measures. To protect home grown businesses from complaining about unfair competition. This leads to category exclusions and on some pretty surprising products. Developing countries may not have the resource to build strongly technical equipment but can produce more simple items. It is these simple items like steel or clothing which sometimes doesn’t make it onto the list. Raw materials though like cotton or fabrics do allowing cheap imports of materials to manufacture within the developed world.
How to obtain a GSP certificate
For the UK it is simple and straight-forward to work the GSP System. The major factors are :
- Check Which countries are covered by the Generalised System of Preferences system.
- Are your products are covered
- Check the tolerance levels for origin rule, especially if importing from different countries for assembly
- Provide proof of origin
For more information then have a look at the .GOV website as they have a simplified section designed to walk shippers and importers through it. If your goods qualify then taking advanatage of the system may help keep costs down. Trading globally can be fairly straightforward. Increasing you reach and presence around the world and helping developing countries improve their GDP. At the same time reducing your manufacturing costs with reduced duties on products for assembly. They system has been around for nearly 50 years and may help your business.