One of the early and notable achievements of the United Nations Conference for Trade and Development (UNCTAD), established in 1964, was to conceive the Generalised System of Preferences (GSP); its adoption was facilitated by the WTO’s General Agreement on Tariffs and Trade (GATT) in 1971 through the enactment of initially time-bound special waivers that would allow countries to offer differentiated general preferences to certain countries. This was followed later by the GATT Enabling Clause in 1979, which provided for permanent exemptions to countries’ most favoured nation (MFN) obligations. The Enabling Clause, which is formally known as the Decision on Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries, allows developed countries to offer differential and more favourable treatment to developing countries, and forms the legal basis of the GSP.

The US GSP provides beneficiary countries including South Africa with significant tariff concessions, subject to its legislated criteria. During 2019, the United States Trade Representative (USTR) was petitioned to review South Africa’s continued compliance with these eligibility criteria, pertaining to intellectual property and related copyright legislation that South Africa was planning to enact, and which is considered to potentially breach the GSP eligibility criteria. The relevant legislation spent years in the development stage, was passed by parliament and presented to the President for signature in 2019, but was very recently referred back to parliament due to constitutional concerns. Since the petition was accepted by the USTR as procedurally valid, this triggered the GSP country practice review of South Africa. This working paper provides greater context to the review by outlining key characteristics and trade performance indicators of the US GSP, as well as discussing some of the potential implications for South Africa’s preferential market access to the US.

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