The beginning of the end for GSP, or just the end of the beginning?

GSP schemes are subject to review every decade. The European Community's scheme, one of the earliest and now covering trade worth ECU 16 billion, is now overdue for review, although bogged down in the 1992 process. The Commission's reform proposals are still inchoate but seem less ambitious than those proposed by OD1 a decade ago, even though so much in world trade has changed meanwhile. Principles underlying the new EC Guidelines are examined and contrasted with updated OD1 proposals. The case is made for a trade assistance package for the poorer developing countries as the new raison d'être for GSP. New guidelines for GSP beneficiaries based on graduation and differentiation are proposed. in contrast, the protectionist and product‐linked sentiments behind the EC proposals, and its use of GSP already as an instrument of political reward in drug economies and in reforming Eastern Europe, are seen as indications that there are pressures to disband GSP altogether. This would mark a return to selective preferences and intra‐bloc trading.