Generalized System of Preferences, GSP

: The EU is a customs union which taxes imports upon entry (Photo: www.integrationpoint.com/.../?p=169)

The EU is a customs union which taxes imports upon entry.

For certain products from certain countries there are special allowances (derogations). These are designed to help developing countries to sell certain quantities of products into the EU with minimal taxation.

However, the right to sell such quantities is organised in such a way that, for example, the right to sell a T-shirt into the EU costs more than the actual T-shirt. What was intended to be helpful to developing countries can instead prove helpful to firms that possess the right to sell the various quotas at reduced tarrifs. These firms are often owned by Westerners.

Notes

The system of varying tariffs invites fraud.

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