Archived - Backgrounder: General Preferential Tariff

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In the early 1970s, the United Nations Conference on Trade and Development recommended that developed economies grant autonomous and non-reciprocal tariff preferences to imports from developing countries under a Generalized System of Preferences (GSP) in an effort to promote the industrialization of developing countries.

Most developed economies, including the United States, the European Union and Japan, have GSP schemes for developing countries, although these vary with respect to countries and products covered. Canada’s program, the General Preferential Tariff (GPT), was implemented in 1974 with the policy intent of encouraging imports from developing countries to increase their export earnings and promote their economic growth.

Under the GPT, Canada currently offers duty-free or preferential tariff rates (i.e. lower than the standard Most Favoured Nation rates) on most products from 175 designated beneficiaries (see the Canada Border Services Agency website for a list of current beneficiaries and for more details on products covered by the GPT).

The GPT is legislated in the Customs Tariff on a 10-year cycle and is now set to expire on June 30, 2014.