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Economy question from JKAS Prelims, 2023 by JKPSC

Consider the following statements regarding the Generalized System of Preferences (GSP):

1. The only countries that grant GSP are USA, EU and Russia.
2. The objective of GSP was to give development support to poor countries by promoting exports from them into developed countries.
3. Most favoured Nation (MFN) status and GSP are similar in tariff structure whether it is a developed or developing country.

The correct answer/s is/are:

Last updated Jun 24, 2026
Correct Answer: Option A — 2 only
1. Only USA, EU, and Russia grant GSP (Incorrect)
The word "only" is the red flag here. While the USA, EU, and Russia are major providers, they are not the only ones. Many other developed countries (and some transition economies) provide GSP, including Japan, Canada, Norway, Switzerland, New Zealand, and Australia.

2. Objective of GSP (Correct)
The primary goal of the GSP is to foster economic growth in developing and least-developed countries (LDCs). By allowing their products to enter developed markets with low or zero tariffs, it makes their exports more competitive, helping them earn foreign exchange and create jobs.

3. MFN and GSP are similar in tariff structure (Incorrect)
They are actually opposites in principle:

MFN (Most Favored Nation): This is a principle of non-discrimination. If a country lowers a tariff for one WTO member, it must do it for all. It ensures a level playing field.

GSP: This is an exception to MFN. It is a discriminatory (but legal) system where a developed country gives better treatment (lower tariffs) to a developing country than it gives to the rest of the world.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
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JKPSC JKAS 2023 Prelims

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Exam JKPSC
Recruitment JKAS
Stage Prelims
Year 2023
Subject Economy
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