The removal of six categories of Chinese products from the European
Union's Generalized System of Preferences (GSP) will have a minimum
impact on Chinese exports given the good situation between the two
economies, a European Commission official said on Friday.
Franz Jessen, minister-counsellor of the European Commission
delegation in China, said the removal of the six categories will
not affect the volume of China's exports to the European Union, as
has been already proven by the removal in 1998 of nine other
categories of Chinese products.
The EU said earlier that six categories of Chinese product would be
removed from the GSP by May next year.
The six categories affected are edible products of animal origin,
plastics and rubber, paper, optical products and clocks,
electromechanical goods, and consumer electronic goods.
The GSP benefits developing countries by enabling qualified
products to enter EU markets at reduced or zero rates of duty.
Many Chinese exporters have worried that the change will deal a
severe blow to China's exports.
But Jessen said this would not happen. "According to our
experience, most of the export flows are not hampered by the
withdrawing of the tariff preference,'' he said.
In
1998, nine categories of Chinese products were removed from the
GSP, including grain, fruit, leather, clothing, footwear, glass and
ceramics.
However, all but one of the nine categories have seen their exports
to the EU increase by between 29 percent and 106 percent in four
years.
For example, Chinese clothing exports to the EU increased by 73
percent between 1998 and last year. Exports of glass and ceramics
jumped by 86.2 percent in the same period.
Moreover, given that China-EU trade is prospering, Jessen said he
believed Chinese exports to the EU will not be hampered by the GSP
changes.
Some 80 percent of Chinese products bought by the EU were not
exported under the GSP.
Eighteen Chinese products will still benefit from the GSP even
after the six categories are removed next year, Jessen said.
Bilateral trade between China and the EU is growing healthily,
Jessen said.
According to Chinese statistics, Chinese exports to the EU
increased by 48.6 percent year on year between January and May this
year. Imports from the EU grew by 38.2 percent.
"The high growth rates are very impressive as the world economy is
gloomy,'' Jessen said.
He
said he expected China to replace Switzerland as the EU's
second-biggest trading partner in about two years, next only to the
United States.
China last year replaced Japan as the third-biggest trading partner
of the EU.
The removal of the six product categories from the GSP will involve
two steps. In November this year, 50 percent of the tariff benefit
will be cut. The remaining 50 percent will be cut in May next
year.
Jessen said the GSP benefits removed from China will be
redistributed to other developing countries.
Some 175 economies currently benefit from the GSP. China ranks
first, obtaining about 25 percent of the benefits.
Jessen said the change reflects the fact that Chinese products have
become very competitive in the EU market.
But he urged Chinese companies to produce more high-quality
goods.
(China Daily July 5, 2003)