From April 1St Onwards, Japan Will No Longer Enjoy Preferential Treatment Of GSP, Please Send Your Textile Products As Soon As Possible.

Recently, the General Administration issued a notice. From April 1st, the customs no longer issued GSP certificate of origin and relevant Japanese processing certificate.

The specific announcement is as follows:

About no more goods exported to Japan

Issuance of GSP certificate of origin

Customs General Administration Announcement No. forty-eighth 2019

According to the Japanese Embassy in China, the Ministry of finance of Japan decided to no longer give preferential treatment to China's GSP tariffs from April 1, 2019.

The relevant matters are hereby announced as follows:

First,

Two. If the consignor needs the certificate of origin on the date of shipment, he may apply for the issuance of the non preferential certificate of origin.

Notice hereby.

Customs head office

March 22, 2019

Tips for Xiao Bian

1, enterprises that have exported goods to Japan, in order to enjoy the preferential tariff of the GSP certificate of origin, must notify the export consignor to strive for the GSP certificate of origin and the shipment of goods before April 1, 2019.

2, at present, China is actively promoting negotiations between China, Japan and Korea, and hopes that in the near future, products exported to Japan can enjoy preferential tariff treatment in the agreement of the free trade area.

Why did Japan suddenly announce the end of China's GSP preferences?

In November 2016, Japan's Ministry of Finance officially announced the readjustment of the preferential tariff system.

The new standard exclude 5 countries from China, Mexico, Brazil, Thailand and Malaysia from the list of tariff relief lists for developing countries, which means that Japan will terminate the GSP policy from 2019.

This is undoubtedly bad news for our export enterprises.

Policy interpretation: tariff preferences are gone.

Preferential tariff, referred to as preferential tax, is also known as preferential tariff of GSP. It refers to the general, non discriminatory, non reciprocal preferential tariff of semi manufactured goods manufactured by industrial developed countries to developing countries or regions. It is a preferential tax on the basis of the most favored nation tariff.

This policy is conducive to helping recipient countries increase exports and promote industrialization and economic development.

According to the latest GSP policy in Japan, the traditional superior products such as organic chemicals and plastic products will not be treated in Japan for more than 35%-90% from 2019.

The tariff concessions granted by Japan were about 3% on average, which means that the average tariff rate of Japanese goods exported to about $12 billion a year is about 3 percentage points overall, and some products even go up to 10 percentage points.

It is estimated that the increase in import tariff rate of Japanese imports has resulted in an increase of nearly 300 million US dollars in the tariff cost of goods exported to Japan, which will weaken the competitiveness of our export products in the Japanese market to a certain extent.

For example, the only Japanese customer of an organosilicon company in Jiangsu, who graduated from GSP, has increased the tariff cost of $3 million 800 thousand a year, and has been forced to turn to other suppliers.

Direct consequence -- the impact of textile industry and electromechanical industry

It is worth noting that textile and other labor-intensive Chinese products occupy more than 60% in the Japanese import market. The abolition of the Japanese GSP system is particularly serious for the textile industry.

Vietnam, Indonesia, Bangladesh and Kampuchea are our main competitors in the textile and raw materials market in Japan. While Japan has abolished the GSP treatment in Japan, it has retained the GSP treatment in those countries.

In recent years, due to the rising labor cost and price level in China, the average labor cost in textile and other industries is 1-3 times higher than that in Southeast Asian countries.

After the implementation of the new GSP policy in Japan, the import tariff rate of textiles and raw materials in Japan will be 1.06-14.2 percentage points higher than that in Vietnam, Indonesia, Bangladesh and Kampuchea, leading to a more competitive situation in China.

At the same time, China's electromechanical products, as another main product of Japan's exports, are still dominated by Japanese funded enterprises in China.

Many Japanese companies import raw materials from China, or sell products to China as production bases, and they will not be able to enjoy the GSP treatment, which will affect the layout and product prices of these Japanese enterprises.

Chain reaction - Japanese investment or pfer in China

Under the global value chain and the current tariff system, many Japanese companies have set up production bases in China and have established a global production and circulation system.

According to the Japan Trade Promotion Organization survey, with the rising labor cost and price level, the negative effects of Japan's GSP will soon ferment, and the trend of Japanese enterprises' withdrawal is becoming more and more obvious.

The proportion of Japanese funded enterprises to reduce investment scale, withdraw or pfer to third countries has exceeded 10%.

Because the chemical products exported to Japan can be exempt from the import duty of 3.1%-6.5% on the basis of GSP certificate of origin, the chemical industry has become one of the key industries for Japanese investment in China.

Take a chemical enterprise in Qingdao, Shandong as an example, the company is a wholly Japanese owned enterprise wholly built by the Japanese parent company. The company said that after the cancellation of the preferential treatment system for China's GSP, the company's annual customs clearance cost will rise by nearly 140 million yen, and will affect the company's next investment layout.

Coping strategies: seeking diversification strategy

In order to minimize this impact, the inspection and quarantine department suggests that we should open up other markets for the treatment of GSP in China, such as exporting products to Russia, Belarus, Ukraine and Kazakhstan, so as to continue to enjoy preferential treatment of GSP.

We should give policy tilt in the aspects of industry guidance, independent brand building and financial support. We should speed up the pformation and upgrading of enterprises, foster competitiveness with brand, quality and service as the core and gradually get rid of the dependence on price advantage.

It is necessary to encourage qualified enterprises to invest and build factories in Southeast Asia and other regions, reduce labor costs, and make use of traditional trade partners such as Japan and the EU to grant preferential treatment or tariff concessions to third countries, expand exports and improve efficiency.

We should make full use of the trade agreements between China and ASEAN and Australia and other countries and regions, and make use of the preferential tariff policies given by these countries and regions to gradually optimize the export market structure and create a new competitive advantage.

As early as August 2017, the AQSIQ issued an article: Japan will soon graduate "Huapu Hui", and will finally terminate the GSP policy in China in 2019.

GSP certificate of origin referred to as FORM A certificate

GSP is a common, non discriminatory and non reciprocal tariff preferential treatment for developed countries to export manufactured goods and semi manufactured goods (including some primary products) to developing countries.

It is usually issued on the basis of the rules of origin and relevant requirements of the GSP to the beneficiary countries. It is an official document that enjoys the preferential treatment of GSP preferences when the goods are exported to the donor countries.

Since the EU announced the GSP in 2015, China has given preferential treatment to the GSP in Russia, Belarus, Ukraine, Kazakhstan and other countries.

But the GSP is not permanent.

When developing countries or regions have exported more and more products under preferential policies, and the speed of economic growth has correspondingly accelerated and reached a certain level, developed countries believe that these countries or regions can graduate, and this preferential treatment will be abolished.

For example, in March 4, 2019, the office of the United States trade representative announced that under the direction of President Trump, the US government plans to cancel the GSP treatment granted to India and Turkey.

The graduation system includes the national graduation system and the product graduation system. The former is intended to abolish the national beneficiary qualification, while the latter means abolishing the qualification of a product.

Note: similar to China's "poor hat" in the poor counties, international cross-border trade is also the same. When the developing countries' economic level and growth rate reach a certain level, they should also consider GSP Graduation.

According to Japanese customs statistics, the import and export volume of bilateral goods between Japan and China in 2018 was 317 billion 530 million US dollars, an increase of 6.8%.

Among them, Japan exported 143 billion 990 million US dollars to China, an increase of 8.4%, and imports from China 173 billion 540 million US dollars, an increase of 5.5%.

Japan's trade deficit with China is US $29 billion 550 million.

The main commodities imported from Japan were electromechanical products, textiles and raw materials and furniture toys. In 2018, the import volume was 78 billion 900 million US dollars, 21 billion 880 million US dollars and 10 billion 750 million US dollars respectively, an increase of 4.7%, 2% and 1.3%, accounting for 45.5%, 12.6% and 6.2% of Japan's total imports from China.