Generalised System of Preference, European Union, Preferential Trade Agreement.
International trade had over recent years become more efficient and importers have looked for ways to keep costs down while maintaining quality. The European Union provides incentives to importers to trade internationally with lesser developed countries by reducing the entrance tariff to the EU. It provides a preferential trade agreement in the form of generalised system of preferences. However, there are many imports into the EU that qualify for the preference but importers are not registering these goods for preference so that there is under-utilization of the preferences available. While there are many studies of the generalised system of preference and the benefits that the preference provides to the exporter, along with its effects on the exporterâ€™s economy, there are few studies of the effect on importers and how they apply the preferences. This paper explores the issues that importers face when wanting to import from Lesser Developed economies. It establishes why importers are not using preferences to the full potential. Senior management in ten European Companies were interviewed to understand the problems they face when importing from non-EU countries.
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