GSP in the "spaghetti bowl" of trade preferences

Abstract

The paper examines the relative position of GSP (tariff preferences for developing countries) compared to ordinary tariffs and free trade agreements in Norway, the EU and the USA. On average, ordinary GSP gives a tariff rebate of less than 50% in all countries. “Extended” GSP, given to the Least Developed Countries (LDCs) and others, implies zero tariffs in Norway and the EU, but only partial liberalisation in the USA. EU provides extended GSP for 119 countries, while the USA does so for 76 and Norway for 52. Considering the shares of trade rather than the number of countries, extended GSP covers 5% or less of total trade in all cases, and ordinary GSP is much more important. Compared to tariffs in free trade agreements, ordinary GSP is inferior in the USA and the EU, but not too far behind in Norway. This is due to recent cuts in MFN tariffs as well as improvements in the GSP system of Norway. For manufacturing, Norway has low tariffs and a generous GSP system. This is however not the case for agriculture.