According to European Commission Regulation No. 1421/2013, starting from January 1, 2015, all products from mainland China will no longer receive EU GSP preferences. Affected by this, the average tax rate on my country’s products exported to Europe has generally increased by about 3 percentage points.
The Generalized System of Preferences is a universal, non-discriminatory and non-reciprocal tariff preference system that developed countries grant to developing countries for exports of manufactured and semi-manufactured products (including certain primary products). According to relevant regulations, when a certain type of product in a beneficiary country is deemed competitive by the EU and occupies a certain market share, the country’s products will be “graduated” by the EU and will no longer receive GSP treatment.
After my country no longer enjoys the GSP treatment, tariff costs will increase, and the selling prices of our products in the EU market will increase, which will weaken the competitiveness of our products in the EU market. It is understood that with the cancellation of the GSP treatment, the average tax rate on my country’s products exported to the EU has generally increased by about 3 percentage points. In addition, while the EU has canceled the Generalized System of Preferences for my country’s export products, it continues to implement GSP treatment for some products from Southeast Asian countries such as India and Vietnam, as well as Peru, Argentina and other South American countries. The cost advantage of these countries’ products will be far stronger than our country. It is understood that some companies have reported that when communicating with EU customers, they could not reach an agreement on price, so the customers ended up purchasing similar products from Indian companies.
