Nepal has appealed to the European Union to extend the Generalised System of Preference (GSP) facility in exports as a support to the local economy to recover from the devastating earthquakes last year which was then followed by months-long border blockade. The EU has been planning to phase out GSP facility which was extended to least developed countries (LDCs) from the beginning of 2017. Citing the blow to Nepal’s economy due to the massive temblor and disruptions of supply lines due to the border blockade in the southern plains, the Nepalese government has requested the EU for extension of the facility, says Rajendra Singh, senior officer at the Trade and Export Promotion Centre.
Like Nepal, other LDCs have also been requesting the 28-nation bloc for an extension of the facility as they are incapable of strengthening their economy sans the facility due to various circumstances. EU has been offering zero duty facility for products (except arms and ammunitions) manufactured in the LDCs during imports to the European market.
The EU had adopted a reformed GSP law on October 31, 2012 which offered zero tariff facility to the LDCs to provide them level with playing field in the markets of developed countries. The developed countries offered this facility so that the industrial (production) base of the LDCs could be strengthened. Every year, the European Commission submits its report on GSP in the European Parliament.
