BRUSSELS, Belgium – There’s rising confusion on what’s to happen with the rapidly growing import into the EU of bikes produced in countries like Bangladesh, Cambodia and Vietnam as the current Generalised System of Preferences (GSP) scheme is officially ending on December 31, 2011. This is ruled by Commission Regulation (EU) No 1063/2010 of 18 November 2010.
Paragraph 1 of this Commission Regulation (click here for the complete document) says: “By virtue of Council Regulation (EC) No 732/2008 of 22 July 2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31 December 2011 and amending Regulations (EC) No 552/97, (EC) No 1933/2006 and Commission Regulations (EC) No 1100/2006 and (EC) No 964/2007 (2) the European Union grants trade preferences to developing countries, in the framework of its scheme of generalised tariff preferences.”
However, the export duty free status for some Asian countries is not ending later this year. Official EU statements indicate that the European Commission has put forward a "roll-over" Regulation, extending the present system until the end of 2013.
This "roll-over" Regulation has been put forward in order to avoid GSP lapsing while the institutions discuss the new GSP proposal. The "roll-over" Regulation was approved by the European Parliament on 24 March 2011, by the Council on 14 April and published last May. The proposals will be debated in the Council and European Parliament with a view to having the reformed GSP in place on 1 January 2014 at the latest.
The current GSP regulation is very favourable for Asian bike suppliers as the local content for products made in the Least Developed Countries (LDC’s) has been set at a requirement of just 30% instead of 60% as specified in the old ruling. This big relaxation of the GSP rules made for instance that the bike import from Bangladesh increased by 20% last year.
The countries that under the GSP ruling are completely exempted from EU import duties on bicycles (regular import duty 14%) and P&A (regular import duty 4.7%) are, among others, Bangladesh, Cambodia, Tunisia and Turkey. GSP countries that are subject to reduced import duties; 10.5% import duties on bicycles, 2.5% on pedelecs and e-bikes (regular import duty 6%) and 1.2% on P&A are Vietnam, India, Indonesia, Ukraine and Russia.
Click here for more on GSP in the bicycle industry