Chinese product prices may rise due to review of preferential duties+

TOKYO, Aug. 18 Kyodo -
The government has begun reviewing preferential tariffs for imports from
developing countries, a move that may push up prices of inexpensive Chinese
imports, government sources said Wednesday.
The review has started as China is the biggest beneficiary of the preferential
tariff system amid growing skepticism over whether China should be treated as a
developing country in light of its rapid economic growth and strong
international competitiveness, the sources said.
Under the system designed to support the growth of developing countries by
encouraging imports from them, lower tariff rates are applied to 1,182 products
in 79 sectors and the total amount of tariff reductions is fixed for each
product. Fireworks, for instance, are usually subject to a 4.0 percent tariff
but the rate is cut to zero for imports from developing countries.
While each developing country is eligible for up to 20 percent of tariff cuts
allocated for each product, China has tapped the maximum rate in 46 sectors.
Imports under the preferred tariff system totaled 2.08 trillion yen in fiscal
2008, including 1.62 trillion yen or 77.9 percent for Chinese imports. More
than 10 percent of total imports from China were subject to lower duties in the
year.
In reviewing the system, the Finance Ministry is contemplating cutting the
maximum available rate of total tariff reduction to each developing country to
15 percent from the current 20 percent so as to allow more nations to benefit
from the system, the sources said.
The government is expected to seek approval for changing the preferential
tariff system from the Diet in its ordinary session to be convened in January.
Chinese imports under the system range widely from daily necessities to
industrial products. As price-conscious consumers are increasing in Japan,
importers of Chinese products will find it difficult to raise their prices when
the tariff system is revised, analysts said.
==Kyodo
2010-08-18 23:20:31