Trade preference

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In the context of foreign trade policy , trade preferences are trade preferences (e.g. in the form of lower tariffs ) that a country grants to certain other countries. Within the framework of the WTO , the possibilities of granting such advantages to individual states or integration systems are severely limited by the most-favored nation principle . However, certain trade preferences towards developing countries are promoted within the framework of the WTO.

Tariff preferences in the framework of the world trade system

At the GATT level, a special part is devoted to the relationship between trade and development, namely Part IV of this agreement. The aim of Part IV is to create a legal framework for the desired expansion of trade with and between developing countries, which contributes to the economic development of these countries.


As early as 1964, when working on Part IV of the GATT, several developing countries demanded an amendment to Art. I in order to allow preferences in favor of the Third World. The commitment of the then Argentine General Secretary of the World Trade Conference ( UNCTAD ), Raúl Prebisch , should be emphasized , who agreed to these demands. From the point of view of the developing countries, this norm of the world trading system turned out to be particularly problematic because it contractually anchored the cardinal principle of most-favored nation treatment as part of the principle of non-discrimination. According to the principle of most favored nation treatment , on which Art. I GATT is based, a member state is obliged to immediately and without further conditions benefit similar products from all other member states of any advantage granted to a third party with regard to market access or market treatment.


At UNCTAD II in New Delhi in 1968, Resolution 21 (II) "on the introduction of a mutually acceptable and general system of non-reciprocal, non-discriminatory preferences that is advantageous for developing countries" was adopted, thereby following the proposals of UNCTAD I in Geneva 1964 was largely approved. The Eighth General Principle was formulated during UNCTAD I in Geneva, according to which, despite the recognition of the relevance of the principle of most-favored nation treatment, preferential treatment of developing countries in trade relations with industrialized countries was advocated while limiting reciprocity. Resolution 21 (II) paved the way for the conclusion of an agreement on the introduction of a system of generalized tariff preferences (GSP) through the decision of June 25, 1971 in the GATT, whereby the granting states initially achieved an exemption from the principle of reciprocity for a period of ten years . When creating an exception to the most favored nation clause according to Art I of the GATT without a contractual basis, the proponents of the preferences, including the EEC, were confronted with the problem of the compatibility of this system with the GATT, with three alternative solutions being available: (1) the granting of exemptions via waivers , (2) the modification of the contract via an amendment and (3) the permission via a unanimous declaration. The GATT initially decided to solve the preference problem by granting a waiver, whereby the procedure of Australia was of decisive importance, since this state was the first to offer some developing countries tariff preferences based on an exemption based on Art. XXV GATT since 1966. Art. XXV par. 5 GATT tries to preserve the integrity of the agreement with its multilateral character by limiting itself to the temporary suspension of certain rights and obligations in agreements between states. The waiver expresses the compatibility of a particular behavior with the general goals of the GATT. It means an express waiver of certain contracting parties to invoke rights that they could derive from other contractual provisions. The preference systems at that time were still of a temporary nature, as the GATT waivers on which they were based were subjected to annual control by the contracting parties.

APS from 1971

The European Economic Community was one of the first to introduce its GSP in 1971, followed by other industrialized countries. The US was the last to join in 1977. It was not necessary to extend the special permit for a further ten years, as the contracting parties achieved a breakthrough on November 28, 1979 at the end of the Tokyo Round that was held from 1973 to 1979 with a decision entitled "Differential and More Favorable Treatment, Reciprocity and Fuller Participation of Developing Countries ”and according to their Paragraph 2 lit. a continued to allow derogation from the most-favored nation principle under the GSP. This decision, also known as the enabling clause , is considered to be the permanent legal basis for preferential treatment under the GATT. As a result, the enabling clause represents an exception to the compulsory equal treatment and reciprocity in favor of developing countries, so that GATT members who do not belong to this group of states cannot demand the granting of equal preferences. The Ministerial Declaration of November 29, 1982 includes a decision and an annex on standards and activities of the GATT in relation to developing countries one in which the parties, among others the Committee on Trade and Development, the main responsibility for monitoring the application of the enabling clause transferred to ensure the objectivity and transparency of the APS schemes.


With the temporary granting of trade advantages, the following goals were sought: an increase in the export earnings of the developing countries through the diversification of export products, the promotion of industrialization and an acceleration of the economic growth of the developing countries. These objectives should be achieved by promoting the importation of semi-finished and finished industrial products and certain processed products, but not raw materials and basic agricultural products. The GSP also had to ensure that the beneficiary goods originated in developing countries.


In the long term, trade preferences are likely to lose importance, since today's trade barriers are not of a tariff nature but often take the form of administrative regulations that affect the hygiene and quality of products. Added to this is the lowering of customs tariffs as a result of the increasing liberalization of world trade thanks to the WTO , which no longer leaves the member states any leeway for granting tariff preferences.

European Community trade preferences

Today the GSP is one of the most important EC instruments in trade with developing countries. It is tailored to the different needs of these countries. For countries that are particularly affected by the drug problem, such as the member states of the Andean Community or Pakistan , there are special regulations that have a supportive effect. However, their granting depends on compliance with the principles of democracy and human rights and can be withdrawn in the event of a violation. In this case, a distinction is made between measures with a sanctioning nature on the one hand and incentives on the other. The European Commission (Directorate General Trade), based in Brussels, is responsible for monitoring compliance with these conditions . The EC GSP is regularly reformed at intervals of around five years and adopted in the form of Community regulations.


  • Kühn, Werner Miguel: The Andean Community: Legal Aspects of International Relations between the European Union and Latin American Integration Systems in the Age of the New Regionalism , Aachen: Shaker Verlag , 2003. - XLII, 292 S. - (Reports from the jurisprudence) Zugl .: Kiel , Univ., Diss., 2003. ISBN 3-8322-2102-6

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