New GSP Tariffs: Lower Import Duties

BRUSSELS, Belgium (November 26) - The current EU scheme of Generalized Tariff Preferences (GSP) will end on December 31, 2001. It is based on Regulation 2820/98 which is now ripe for renewal. Recently the European Commission has submitted a draft for the new Regulation to the European Council. This draft holds serious implications for the bicycles, scooters, motorcycles, components and accessories imported into the European Union under the scheme of Generalized Tariff Preferences. The European Commission intends to boost the trade in more sensitive products by applying a differentiation mechanism with only two categories, sensitive and non-sensitive products. This is of major interest for the two-wheeler sector in Europe as bicycles, mopeds and motorcycles so far were classified as sensitive products, and their components and accessories as semi-sensitive products. In the new system, non-sensitive products are granted complete exemption of duties. Other categories are bundled in one group of sensitive products with a duty tariff which will be 3,5% lower than GSP-duties today. As a result, the import duties will decrease from 5.6% to 2.1% for mopeds and motorcycles and for bicycles from 10.5% to 7%. Import duties for bicycle components and accessories that were 1.6% are dropped completely as well as the duties for motorcycle components and accessories which until now were also 1.3%. Listed GSP countries (related to the import of bicycles, motorcycles and their components) are Bangladesh, China, the Philippines, India, Indonesia, Mexico, Russia, Sri Lanka, Thailand and Vietnam. Bangladesh has been granted the status of least developed country, which makes all imports from this country import duty free. The import of complete bicycles as well as some specific bicycle components from China and of bicycles from Thailand and Indonesia are subject to anti-dumping duties. As for the effect of these duties on GSP, the draft for the new Regulation stipulates: "The tariff preferences shall not apply to products which are subject to anti-dumping measures, where the level of those measures is based on an injury margin derived from import prices which do not reflect the said tariff preferences." The European Council should decide on the draft for the new GSP Regulation before the end of the year. EU's new scheme of Generalized Tariff Preferences should become effective on January 1, 2002 and will run until December 31, 2004.(AR)