EU tariff upsets German toy makers

PUBLISHED : Saturday, 14 January, 1995, 12:00am
UPDATED : Saturday, 14 January, 1995, 12:00am

GERMAN toy manufacturers in China are unhappy with the new European Union (EU) tariff system, the generalised system of preference (GPS), says the director of the Association of German Toy Industries.

Corinna Printzen said at a toys and games fair in Hong Kong yesterday that German manufacturers in China were upset.

'It's more expensive with the tariff,' she said.

The preferential tariff system will replace the previous system of privileges for beneficial countries which had duty-free quotas based on a ceiling.

The new system will depend on a country's economic standing as at 1991, but goods or sectors which are more sensitive will face higher rates on tariffs.

The preferential tariff rate between one and 100 per cent would be worked out from the conventional tariff.

She cited an example of how it would work: 'The tariff on toys from China was eight per cent between 1993 to 1994. During China's preferential status between 1994-1995 there was no tariff.

'But from January 1995, the tariff is 70 per cent from eight per cent [the conventional tariff rate] which is [equal to] 5.6 per cent or nearly six per cent.' The new system, which started on January 1 and will last for three years, was decided by the Commission and Council of Ministers of the European Community.

She anticipated manufacturers would face higher costs but she was unsure how it would be handled.

'The new system is completely different from former systems,' she said.

'We used to have ceilings; once a ceiling was reached you paid the normal conventional duty. Now you have no ceilings but now you have the classification into sensitive, non-sensitive and semi-sensitive.' Although toys were classified as non-sensitive, at the request of Greece, the preferential tariff system would exclude the category of toys which now faced quotas.

The toys excluded are toy sets, plastic, die-cast and animal stuffed toys. These products were targeted because they were easily made, she said.

She did not expect more quotas to be imposed on China in addition to existing quotas on stuffed, plastic and die-cast toys.

She estimated quotas on Chinese toys had reduced imports to Germany by eight to 10 per cent.

Although quotas on toys were being increased from 27 to 33 per cent, the total amount of imports allowed per country would be diminished because the enlarged quotas would be shared out with the three new EU members, she said.

Despite disagreements, German manufacturers with production in China, accounting for 60 per cent, were against quotas.

'To speak frankly it will not help because quotas cannot be an instrument of help if the economy or if a company does not run well,' she said.

German companies could be deterred by quotas from setting up in China and were seeking to relocate instead in places like Thailand and Singapore.

GPS will phase out tariff privileges on goods from more developed Asian countries, including Hong Kong.