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Consider the following statements.
1. The Generalized System of Preferences (GSP) is a preferential tariff system wherein differential tariff could be imposed by a nation on various countries depending upon factors such as whether it is a developed country or a developing country.
2. The concept of GSP is very different from the concept of most favoured nation (MFN) status.
3. Generalized System of Preferences is outside the purview of WTO.
Which of the above statements is/are correct?
- a)1 only
- b)1, 2
- c)1, 3
- d)1, 2, 3
Correct answer is option 'B'. Can you explain this answer?
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Verified Answer
Consider the following statements.1. TheGeneralized System of Preferen...
The Generalized System of Preferences, or GSP, is a preferential tariff system which provides tariff reduction on various products. The concept of GSP is very different from the concept of “most favored nation” (MFN). MFN status provides equal treatment in the case of tariff being imposed by a nation but in case of GSP differential tariff could be imposed by a nation on various countries depending upon factors such as whether it is a developed country or a developing country. Both the rules comes under the purview of WTO.
Most Upvoted Answer
Consider the following statements.1. TheGeneralized System of Preferen...
Statement 1: The Generalized System of Preferences (GSP) is a preferential tariff system wherein differential tariff could be imposed by a nation on various countries depending upon factors such as whether it is a developed country or a developing country.
The statement is correct. The Generalized System of Preferences (GSP) is a preferential tariff system that allows developed countries to grant preferential tariff rates to developing countries. Under the GSP, developed countries provide preferential access to their markets for products originating from developing countries by reducing or eliminating tariffs on those products. The purpose of GSP is to promote economic growth and development in developing countries by encouraging their exports.
Statement 2: The concept of GSP is very different from the concept of most favored nation (MFN) status.
The statement is correct. The concept of GSP is different from the concept of most favored nation (MFN) status. MFN status is a principle in international trade where one country extends its lowest tariff rate to all other WTO member countries. This means that if a country grants a tariff concession to one country, it must extend the same concession to all other WTO members. MFN status ensures non-discrimination in trade between countries and promotes fair and equal treatment.
On the other hand, GSP is a preferential tariff system that allows developed countries to grant preferential tariff rates to developing countries. It is a form of discriminatory trade policy where differential tariff rates are imposed based on the country's development status. GSP provides additional trade benefits to developing countries that are not available to all WTO members under the MFN principle.
Statement 3: Generalized System of Preferences is outside the purview of WTO.
The statement is incorrect. The Generalized System of Preferences (GSP) is within the purview of the World Trade Organization (WTO). The GSP operates under the framework of the WTO and is governed by the WTO Agreement on Subsidies and Countervailing Measures. The WTO oversees the implementation and monitoring of GSP schemes to ensure that they comply with the rules and principles of the WTO.
The GSP schemes of different countries are subject to review and scrutiny by the WTO to ensure that they are not discriminatory or inconsistent with the WTO rules. The WTO provides a platform for countries to address any disputes or concerns related to GSP schemes through its dispute settlement mechanism.
Therefore, the correct statements are 1 and 2.
The statement is correct. The Generalized System of Preferences (GSP) is a preferential tariff system that allows developed countries to grant preferential tariff rates to developing countries. Under the GSP, developed countries provide preferential access to their markets for products originating from developing countries by reducing or eliminating tariffs on those products. The purpose of GSP is to promote economic growth and development in developing countries by encouraging their exports.
Statement 2: The concept of GSP is very different from the concept of most favored nation (MFN) status.
The statement is correct. The concept of GSP is different from the concept of most favored nation (MFN) status. MFN status is a principle in international trade where one country extends its lowest tariff rate to all other WTO member countries. This means that if a country grants a tariff concession to one country, it must extend the same concession to all other WTO members. MFN status ensures non-discrimination in trade between countries and promotes fair and equal treatment.
On the other hand, GSP is a preferential tariff system that allows developed countries to grant preferential tariff rates to developing countries. It is a form of discriminatory trade policy where differential tariff rates are imposed based on the country's development status. GSP provides additional trade benefits to developing countries that are not available to all WTO members under the MFN principle.
Statement 3: Generalized System of Preferences is outside the purview of WTO.
The statement is incorrect. The Generalized System of Preferences (GSP) is within the purview of the World Trade Organization (WTO). The GSP operates under the framework of the WTO and is governed by the WTO Agreement on Subsidies and Countervailing Measures. The WTO oversees the implementation and monitoring of GSP schemes to ensure that they comply with the rules and principles of the WTO.
The GSP schemes of different countries are subject to review and scrutiny by the WTO to ensure that they are not discriminatory or inconsistent with the WTO rules. The WTO provides a platform for countries to address any disputes or concerns related to GSP schemes through its dispute settlement mechanism.
Therefore, the correct statements are 1 and 2.
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Consider the following statements.1. TheGeneralized System of Preferences (GSP) is a preferentialtariffsystem wherein differential tariff could be imposed by a nation on various countries depending upon factors such as whether it is a developed country or a developing country.2. The concept of GSP is very different from the concept of most favoured nation (MFN) status.3. Generalized System of Preferences is outside the purview ofWTO.Which of the above statements is/are correct?a)1 onlyb)1, 2c)1, 3d)1, 2, 3Correct answer is option 'B'. Can you explain this answer?
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