The Trade–Development Nexus in a Geopolitical Era: An Assessment of the EU Generalised Scheme of Preferences Revision

For more than fifty years, the Generalised Scheme of Preferences (GSP) has remained the cornerstone of the EU’s trade and development strategy. Established under the auspices of UNCTAD and in accordance with the Enabling Clause, this unilateral EU instrument provides developing countries with preferential or duty-free access to the single market. The GSP has also become intertwined in the EU’s relations with African, Caribbean, and Pacific (ACP) countries and is recognised as a “fall back option” for countries of the Global South that are unwilling to conclude an Economic Partnership Agreement (EPA). Despite its longstanding significance, the 2012 GSP Regulation was only recently revised following four years of inter-institutional negotiations. The latest EU GSP overhaul takes place against the background of a global paradigm shift in trade and development policy. In the context of trade policy, the ascent of geoeconomics and rising global competition have redirected the EU’s focus toward creating a level playing field and safeguarding its single market. A testament to such a transition is reflected in the 2023 European Economic Security Strategy, 2020-2024 DG Trade Strategic Plan and the 2021 EU Trade Policy Review. Meanwhile, the future of preferential trade tools elsewhere has become uncertain. The US GSP expired back in 2021 and is yet to be renewed with the future outlook for the US African Growth and Opportunity Act (AGOA) remaining unclear. In addition, even though the GSP programmes of Japan and Canada are operational - they contain far less conditionality and political leverage when compared to the EU GSP. Given these circumstances, this paper examines the question of how the recent geopolitical turn in EU trade policy shaped the latest revision of the GSP. To this end, the study provides a comparative assessment of the revised GSP Regulation and its 2012 predecessor. It offers a detailed analysis of the key regulatory changes including, but not limited to, the introduction of readmission obligations for beneficiary countries, strengthened political conditionality through an expanded set of international conventions, an urgency procedure for the withdrawal of preferences and a lowering of product graduation thresholds. This study adopts a qualitative approach bringing together critical discourse and documents analysis supplemented by semi-structured interviews.