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On March 5, 2021, the Eurasian Economic Commission made Resolution No. 17 to reduce the number of developing economies and least developed economies that enjoy the Eurasian Economic Union (hereinafter referred to as the "Union") Generalized System of Preferences (GSP) tariff preferences List. On April 11, the resolution was officially released, stipulating that the new list will take effect six months later, that is, October 12. After the new list comes into effect, China will no longer enjoy the Union’s GSP tariff preferences, and the Union’s most-favoured-nation tax rate will resume for relevant products.

According to the Union’s Generalized System of Preferences tariff preferences, 25% of import tariffs are exempted for meat and meat products, fish, vegetables and fruits, medicines, chemicals, and timber from developing economies.

The basis for this adjustment of the Union is the provisions on the standards of economies enjoying preferential tariffs of the Union’s general taxation system adopted by Resolution No. 47 on April 6, 2016. According to relevant regulations, according to the World Bank standards, economies that are "low-income" and "lower-middle-income" (per capita GDP less than US$4,045) can obtain the status of a "developing economy" and enjoy tariff preferences.

The adjustment of the alliance includes the exclusion of 75 economies including China, Brazil and Turkey from 103 developing economies, and the exclusion of 2 from the 50 least developed economies (one of which is transferred to a developing economy). Among the new benefit-benefiting economies, there are 29 remaining developing economies and 48 remaining least developed economies.

The Generalized System of Preferences is a tariff preference promised by developed countries for products from developing countries. The EU is my country's second largest trading partner after ASEAN. In the 1970s and 1980s, the EU’s GSP treatment played a major role in promoting the export of Chinese products to foreign markets.

1. Increased tariffs have weakened market competitiveness

The purpose of the EU's Generalized System of Preferences is to help developing countries exempt or reduce tariffs on products exported to the EU market.

The abolition of preferential tariffs means a higher tariff level, which will undoubtedly have an impact on the export of Chinese timber products. The increase in tariff costs makes it difficult for Chinese timber products to have a price advantage in the EU market, and to a certain extent weakens the competitiveness of my country's timber products in the EU market.

2. Facing the pressure of three-party competition

Losing its price advantage, my country will face pressure from tripartite competition. As the European Union still implements universal treatment for other countries, while my country is competing with these countries enjoying the GSP, it also has to compete with third countries that do not enjoy the GSP and the EU's own products. As a result, my country's timber products face a more severe competitive situation in the EU market.

At present, there are many uncertain and unstable factors facing the development of wood. While the changes in the EU's GSP have brought huge challenges to the wood industry, it has also created a better opportunity and environment. All timber merchants need to adopt appropriate response strategies to adapt to the changes in the EU's GSP, realize the "diversification" and "go global" strategy, and enhance the competitiveness of timber products in the international market.