The review of the system of “Graduation” under GSP scheme

As of 1 March 2017

The review of the system of “Graduation” under GSP scheme

　Under Japan’s GSP (Generalized System of Preferences) scheme, Japan grants preferential tariff treatment to 143 countries/territories as of 1^st April 2016, and prepares the system of “Entire Graduation” and “Partial Graduation” which exclude entirely or partially countries/territories having achieved economic development from the GSP treatment.

 (→Click here  to check the current criteria and objects of these two graduation systems.)

　Considering that several emerging market countries among GSP beneficiaries have achieved a certain level of income and acquired exporting competitiveness on a global scale as a result of their economic development, the government has reviewed the criteria of the systems of graduation with the purpose of providing GSP’s benefits to countries more in need.

　The points of the review are as below.

(1) The modification of the criteria for “Entire Graduation”

　Countries/Territories which have satisfied either or for three consecutive years shall be excluded from the list of beneficiaries.

　 Countries/Territories that are classified as high income economies according to the World Bank income classifications

　 Countries/Territories that satisfy both (a) and (b) below

     (a) Countries/Territories that are classified as upper-middle income economies according to the World Bank income classifications

     (b) Countries/Territories that have a 1% or greater share of world exports according to the World Trade Organization statistics

(2) The modification of the criteria of “Partial Graduation”

　Countries /Territories which have satisfied either or for one year shall be the objects of “Partial Graduation.”

　 Countries/Territories are classified as high income economies according to the World Bank income classifications

　 Countries/Territories that satisfy both (a) and (b)

     (a) Countries/Territories that are classified as upper-middle income economies according to the World Bank income classifications

     (b) Countries/Territories that have a 1% or greater share of world exports according to the World Trade Organization statistics

Criterion for products* will not be changed.

     *The value of Japan’s imports of the product originating from the beneficiary exceeds one billion yen and 25% of the total value of Japan’s imports of the product from all over the world in the trade statistics of two years ago.

To judge target products of “Partial Graduation”, the criterion above is applied by 9 digit tariff code unit to agricultural/fishery products, and 4 digit tariff code unit to industrial products, in order to harmonize the rule currently used under “Product-by-Exclusion.”

(3) Entry into force

　In order to ease effects on economic operations, consumers and countries/territories which will “graduate” and for the smooth shift to the new system, new “Partial Graduation” will come into force as of 1^st April 2018 and new “Entire Graduation” as of 1^st April 2019.

※Least developed countries(LDCs) are not the subject of the system of two “Graduation.”

※According to the World Bank income classifications published in 2016, countries/territories are classified as follows:

　　$12,736 or more：high income

　　$4,126  to $12,735：upper-middle income

　　$1,046  to $4,125：lower-middle income

　　$1,045  or less：low income

For inquiries, please contact us as below.

(Contact point)

○Inquiries regarding Japan’s GSP system

Tariff Policy and Legal Division, Customs and Tariff Bureau, Ministry of Finance

（Main）03-3581-4111（Extension 2490）

（Direct）03-3581-4786