EU considers eliminating China from the generalised system
According to latest reports from the press, there are implications that the EU is considering to increase the tax rate under the generalised system of preferences (GSP) aiming at the Chinese commodities in 2003 and raise favourable tax rate to ordinary tax rate. It will then cancel the generalised system against Chinese commodities in the first half of 2004.
Such action is expected to effect almost all traditional exports to the EU from
China. According to analysts, this move by the European Union indicates that it is possible that the developed countries survey the role of the generalised system in the international trade once again.
It is estimated by the European customers of Chinese commodities that the tax rate under the generalised system will be raised from 3.5% to 5% on most of the imported goods from
China as of October 2003, and thereafter EU will officially cancel the qualification of Chinese merchandise under the generalised system effective May 2004.