The Agreement establishing the Global System of Trade Preferences (GSTP) among Developing countries was signed on 13 th April, 1988 at Belgrade following conclusion of the First Round of Negotiations. The Agreement entered into force on 19 th April 1989. Forty-four countries have ratified the Agreement and have become participants.

The GSTP establishes a framework for the exchange of trade concessions among the members of the Group of 77. It lays down rules, principles and procedures for conduct of negotiations and for implementation of the results of the negotiations. The coverage of the GSTP extends to arrangements in the area of tariffs, para-tariff, non-tariff measures, direct trade measures including medium and long-term contracts and sectoral agreements. One of the basic principles of the Agreement is that it is to be negotiated step by step improved upon and extended in successive stages. During the First Round India exchanged concessions with 14 countries. The number of tariff lines on which concessions were granted by India is 31 and in return India received tariff concessions on a wide range of products of its export interest from these 14 countries.

In order to carry forward the exchange of concessions, the second round of GSTP Negotiations was launched in 1991. During the Second round, India held bilateral negotiations for exchange of concessions with 12 countries. These concessions have not been implemented so far.

In the 16 th Session of the GSTP Committee of Participants (COP) held in Geneva on 10 th December, 2003 the Committee decided to constitute an Ad-hoc Technical Working Group amongst other issues to comprehensively review the operations of the GSTP Agreement and study the technical feasibility of the possible means of invigorating and furthering the objectives of the GSTP Agreement.

The recommendations of the Technical Working Group for a new round of negotiations were accepted by the Committee of Participants and in the Special Ministerial Session of the Committee of Participants held in Sao Paulo during UNCTAD XI on 16 th June, 2004, the Ministers decided to launch the third round of negotiations under the GSTP. As per the decision taken therein, a Negotiating Committee will commence negotiations in November, 2004 and conclude the negotiations by not later than November, 2006.