According to NHK news on January 8, 2011, Japanese government is considering to eliminate certain GSP preferential tariff (about 460 items) from April 2011.
Ministry of Finance (“MOF”) in Japan review the rule to what items are applicable to Generalized System of Preferences (“GSP”) tariff, and consequently 462 items of Chinese origin items will be not eligible to GSP tariff. GSP is a system to impose lower import duty to encourage import from developing countries and aim to help their economic development. The new policy by MOF is basically to terminate the GSP tariff to certain items which import amount occupy more than 50% from specific one country or region in consecutive three years. With applying this new policy, many Chinese origin items such as vegetables and variety of consumer items will be in target of the new rule, because import of such items are mostly occupied by China. The import duty rate for such items will increase 2.4% ~ 5.2% by applying MFN rate instead of GSP, and the increased trade cost will affect importers, or will be reflected into retail price in Japan.
MOF plan to amend the Temporary Tariff Measures Law and to implement the new tariff rule from April 2011. As Chinese commodities are gaining competitiveness internationally, it aims to terminate preferential measure to China to help other developing countries. The examples are vegetables from China such as Burdock (HS 0706.90), Matsutake mushroom (HS 0709.59), or consumer items such as Fireworks (HS 3604), Pearls (HS 7116), Fishing rods (HS 9507), or Thermos bottle (HS 9617) etc. All of them have been 0% import duty under GSP, but MFP rate ranges from 2.5% to 5.2%. Other examples are prepared fish such as Mackerel (HS 1604.11) and Eel (HS 1604.19), the GSP duty of them are 7.2%, while MFN rate is 9.6%.
In fiscal year 2009, the 86% of import amount under GSP was occupied by Chinese origin items. The background of this decision is that Chinese products are almost competitive internationally and treated well too much under GSP. system On the other hand, after 462 items are excluded from GSP treatment, still 3090 items are eligible to GSP and most of them are actually imported from China.
The list of HS code of Chinese origin items which will be excluded from GSP on April 2011 is already available in Customs web site. Traders who have business with China and made use of GSP should investigate whether your items are included in the list for assessing the trade cost impact to business in fiscal year 2011.
(Source and list of items: 平成23年度税制改正大綱 内閣府ホームページ)