The European Union will exclude Hong Kong, Singapore and South Korea from its preferential tariff scheme from May 1st because they are too wealthy to qualify, an EU document said yesterday. The EU's Official Journal said the decision was approved by EU ministers at a meeting on December 19th.
The EU's decision to remove Hong Kong, Singapore and South Korea from the Generalised System of Preferences (GSP) was based on several criteria, including that their 1995 per capita gross national product exceeded $8,210 (£5,779), the journal said.
The GSP is aimed at helping developing countries build export markets and the European Commission several months ago stated its wish to "graduate" wealthier Hong Kong, Singapore and South Korea from the scheme.
The removal of the benefits comes at a bad time for South Korea, badly hit by the Asian financial crisis, as it could hinder efforts to export more to Europe. The IMF took the lead recently in putting together a nearly $60 billion bailout package for South Korea.
The Hong Kong government said it was disappointed with the EU decision.
"Our trade has benefited from the generalised tariff preferences under the GSP. The decision of the EU to exclude Hong Kong from the GSP scheme is therefore regrettable," it said in a statement.
Currently, some Hong Kong products, including electrical machinery and equipment, mechanical appliances, plastic articles and shoes, enjoy the tariff privileges.
