Developed Nations have been permitted to extend preferential treatment to Developing Countries through a Generalized System of Preferences (GSP). The GSP however, has encouraged discrimination amongst Developing Countries. India in 2002, made a formal complaint to the World Trade Organization (WTO) that discrimination was particularly prominent in certain aspects of the GSP scheme of the European Community. Since the decision of the Appellate Body in April 2004, many questions have been raised as to what extent can, and should donors, discriminate amongst recipients. This paper revisits the GSP schemes of the European Community and the United States of America and explores the tensions caused by their unilateral and discretionary nature. It also highlights the path that needs to be taken so that conditionality and reciprocity is tempered and a balance is struck between an enhanced cooperation policy of Developed Countries, and the promotion of growth and development of Developing Countries.