Graduate School of International Studies Ajou University
The Generalized System of Preferences (GSP) is a formal system of exemption from the Most Favored Nation (MFN) clause that allows developed countries to grant duty-free and quota-free market access in favor of Least Developed Countries (LDCs) without doing the same for other World Trade Organization (WTO) members. LDCs have been striving, for a decade, to find the right development strategy to enable them to reduce the economic disparities between them and the more industrialized countries. The idea of tariff preferences for developing countries was the subject of considerable discussion within the United Nation Conference on Trade and Development (UNCTAD) in the 1960s. In 1971, the General Agreement on Tariffs and Trade (GATT) enacted two waivers to the MFN which permitted tariff preferences to be granted to developing countries goods. However, both waivers were limited in time to ten years. These waivers will be replaced in 1979, by a permanent exemption to the MFN called the Enabling clause. Thus, the Enabling clause was aimed to give a legal and permanent validity to the GSP scheme.
According to many studies, GSP programs have been a very mixed success. Even if, the GSP programs cover products of the greatest export interests of the LDCs in general and Senegal in particular, they face many obstacles such as rule of origins and complex administrative procedures, supply capacity constraints, infrastructures quality problems among others. Even in the face of its limitations, it would not be also accurate to conclude that GSP has failed to benefit all the LDCs. The GSP scheme has benefited some LDCs a lot and others very little. Market access for LDCs and Senegal in particular, based on their annually exported amount to the “Quad countries” remains still very low. We should understand that, the value of any initiative aimed at improving market access for developing countries in general, and LDCs in particular should be measured against the factors determining the under utilization of current tariffs preferences.
Furthermore, international trade has played a key role in the economic development of many countries and especially for the East Asian countries, known also as “Asian dragons” through innovation and technological progress and by encouraging the reallocation of resources from less to more productive sectors. The rapid economic development process of the “Asian dragons” holds relevance for LDCs in general and Senegal in particular to catch up with industrialized nations in the long run. Therefore, the government of these countries can and should play an active role in their country’s economic growth through incentives economic policies.