The Trade Effects of GSP+

Abstract: The General Scheme of Preferences (GSP) is a trade promoting program offered by the EU to several developing countries. An extension of the program, GSP+, offer more beneficial market access contingent on positive conditionality. I use the gravity equation to estimate effects on export flows for the participants when changing from GSP to the more generous GSP+ using a sample of 53 countries over the time period 1988-2006. I conduct the estimation as a gravity equation estimated with Poisson Pseudo Maximum Likelihood. I find insignificant over-all effects of entering the GSP+ program which is contrary to most of earlier research. On product level however, the effect becomes significant. For some product groups the effect is negative and for some positive.