Attention: The Impact Of 32 Countries' Cancellation Of GSP Treatment On Export Trade Enterprises

Since December 1, China's exports to 32 countries, including EU Member States, the United Kingdom, Canada, Turkey, Ukraine and Lichtenstein, will no longer enjoy the GSP tariff preferential treatment of these countries, and the Chinese customs will no longer issue GSP certificates for these goods.

The adjustment of tariff arrangement in international trade has aroused the general concern of domestic public opinion. Some people question whether these countries no longer recognize China as a developing country? Or have these countries adopted trade measures against China? What is the impact on China's exports?

The announcement means that China's goods exported to the above-mentioned 32 countries no longer enjoy the GSP tariff preferential treatment of these countries.

What is GSP?

The generalized system of preferences (GSP) is a general, non discriminatory and non reciprocal tariff preference system for developed countries (beneficiary countries) to export manufactured goods and semi-finished products from developing countries and regions (beneficiary countries). It aims to help developing countries expand their exports and accelerate their national economic growth. For the related products imported from the beneficiary countries, tariff concession based on the most favored nation rate, or even "zero tariff" access treatment will be given.

What's the matter that China will no longer be given GSP tariff treatment?

With the rapid development of China's economy and the continuous improvement of people's living standards, according to World Bank standards, China is no longer a low-income or middle-income economy. Therefore, several GSP granting countries such as the European Union have announced the abolition of GSP treatment to China in recent years. When interpreting the cancellation of China's GSP tariff preferences by 32 countries, the General Administration of Customs of the people's Republic of China held that this was "with the enhancement of China's economic strength and the improvement of competitiveness of export products, China has graduated from the GSP treatment of developed economies in succession."

From 2012 to 2019, Ukraine, Canada, Switzerland, Lichtenstein, the European Union, Turkey, Japan and other countries have successively cancelled the GSP tariff preferential treatment for China's export goods. In 2021, the Eurasian Economic Union announced the abolition of the GSP tariff preferential treatment.

At present, which countries give China GSP treatment?

At present, there are still three countries in the world, namely, Norway, New Zealand and Australia, which give China GSP treatment.

What is the impact of abolishing GSP tariff preferences on China's exports?

The normal tariff of European and American countries is maintained at 2-3%. Even if the GSP is abolished and restored to the normal tariff level of these countries, the impact on Chinese products will not be significant. One of the most convincing examples is that after the United States imposed large-scale high tariffs on Chinese goods, the volume of trade between China and the United States has not been affected, but has increased substantially.

Prior to that, some foreign trade professionals told the media that the cancellation of GSP treatment by 32 countries would temporarily make some export enterprises lose their tariff preferences, bringing certain pressure. But generally speaking, this kind of influence is limited: as the competitiveness of China's manufactured products is becoming stronger and stronger, simple tariff policy has been difficult to affect the overall situation of international trade of Chinese products, so it will not affect China's export enterprises' long-term struggle for greater market opportunities in the future.

How to deal with the current export enterprises?

The General Administration of Customs of the people's Republic of China suggests that enterprises may apply for non preferential certificates of origin for goods exported to developed economies that no longer give China inclusive treatment.

It is suggested to deal with it from the following two aspects:

First, communicate and explain with foreign customers as soon as possible to avoid inconvenience caused by different types of certificate of origin.

Second, make full use of the achievements of China's free trade zone construction. We should explore emerging markets, optimize the structure of export markets, improve the utilization rate of free trade agreements, and create new competitive advantages. Export the products to the countries and regions that have signed free trade agreements with China, and enjoy the market access treatment of tariff reduction or even zero tariff.