The Government of Nepal has urged the European Union to extend the Generalised Scheme of Preferences (GSP), to support the domestic economy that is recovering from the effect of devastating earthquake last year. The plea has been made as the EU is planning to phase out GSP facility to the least developed countries (LDCs) beginning next year.
Under its reformed GSP law, adopted on October 31, 2012, the EU has been offering zero-duty facility for products (except arms and ammunitions) manufactured in the LDCs for import to the 28-nation European market. But, this has not led to a drastic increase in the share of preferential import in the European market.
One reason for LDCs failing to significantly increase their exports to the EU is that the GSP facility is available only to LDC products with 30 per cent value addition.