Deep Thinking of the India-EC Preference Case——Is GSP Scheme Beneficial to Developing Countries?

In 2005,India's challenge to the European C ommunity's(EC) Generalized System of Preferences(GSP) scheme resulted in a landmark ruling by the W T O 's Appellate Body.T he Appellate Body had a landmark finding that the Enabling C lause imposes legal obligation on the preference-granting countries,w hich for a long time considered GSP treatment a conditional gift and designed their ow n GSP scheme as they saw fit.How ever,the guidance given by the EC-Preference case is far from clear: the legal uncertainties of the "nexus"requirement,combined with the open questions in the"non-discriminatory"requirement,make the Appellate Body's decision difficult to implement.As a result,the decision put the legitimacy of the conditional preferential treatments in EC and the U.S.GSP in doubt.O n the other hand,the Appellate Body's decision w as subject to certain practical limitations of the case and generated a good number of legal uncertainties in the area of conditional GSP.T he GSP nevertheless serves the developing w orld even better by forgoing the GSP completely.In conclusion,the operation and the future of the GSP currently remains an unsettled area in the W T O system,w hich w ill be further addressed by later GSP practice.