The “Everything But Arms” (EBA) initiative, introduced in 2001 under the EU’s GSP scheme, grants LDCs duty-and quota-free access for almost all products (as the programme’s name indicates, arms and ammunition are excluded).
For the period until December 31, 2023, it is regulated by Regulation (EU) No 978/2012 of the European Parliament and of the Council.
Access to the scheme is automatic for LDCs. In other words, countries do not need to apply to benefit from EBA, they are added or removed to relevant list through a delegated regulation. However, EBA preferences can be withdrawn certain exceptional circumstances, notably in case of serious and systematic violation of principles of human rights and labour rights conventions (see article 19 of Regulation (978/2012).
Since 2011, the EU has more favourable rules of origin for LDCs in some products. The regulation increased the allowance for use of non-originating materials for many manufactured products, and allowed for garments that had undergone only “single transformation” (e.g. manufacturing of garment using imported fabric) as opposed to “double transformation” (applicable to other developing countries). For agricultural products the rules of origin are identical for developing-country and LDCs.
The EU provides for the establishment of a transitional period of at least three years for countries that graduate from the LDC category. The objective is to alleviate any adverse effects which may be caused by the removal of the tariff preferences granted under the special arrangement for LDCs.
Cape Verde graduated from the LDC category on 20 December 2007. Under the smooth transition arrangements of the EBA, Cape Verde was allowed to continue to benefit from the preferences granted under the special arrangement for LDCs until the end of 2010. In December 2010 the EU decided that the transitional period had not allowed the time necessary for Cape Verde to overcome the over-reliance on one key export sector and thus alleviate potential adverse effects of the removal from the EBA scheme. The smooth transition period was therefore extended until 1 January 2012.
After the smooth transition period ended (31 December 2011) the EU granted “GSP+” status to Cape Verde which grants preferential access to the EU market when certain conditions of good governance are fulfilled.
Maldives continued to benefit from the preferences granted under the special smooth transition arrangement for LDCs, until 31 December 2013.
Utilization by LDCs:
The WTO Committee on Rules of Origin regularly reviews utilization rates under preferential trade arrangements for LDCs: see WTO, Committee on Rules of Origin, Utilization Rates Under Preferential Trade Arrangements for Least Developed Countries Under the LDC Duty Scheme, Note by the Secretariat. 10 October 2018 (G/RO/W/179).
European Commission, Regulation (EU) No 978/2012 of the European Parliament and of the Council of 25 October 2012 applying a scheme of generalized tariff preferences and repealing Council Regulation (EC) No 732/2008
European Commission, Regulation (EU) No 1063/2010 of 18 November 2010 amending Regulation (EEC) No 2454/93 laying down provisions for the implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code.
UNCTAD (2013), Handbook on the Rules of Origin of the European Union. UNCTAD/ITCD/TSB/Misc.25/Rev.3/Add.1