Favourable trade agreements can heavily influence your pricing
Import duties are a common means for European politicians either to restrict or to encourage imports from certain countries, often on the basis of their political, social and environmental performance. This is how Europe’s Generalised Scheme of Preferences (GSP) has caused some shifts in global supply chains. Effective since 2014, this scheme allows some developing countries, including Vietnam, to pay less or no duties on exports to Europe.
As an example sports footwear e.g. tennis shoes attract an EU import duty rate of 16.9% for imports from countries outside the GSP regime and 11.9% for countries within the GSP regime.
Countries such as China, Thailand, Morocco and Tunisia have since 1 January 2015 lost the GSP advantage under the new scheme. This has improved the competitive position of countries still benefiting from GSP arrangements, like Vietnam. Once the EU-Vietnam FTA comes into force this advantage may increase further.
® For more detail on EU and GSP import duties consult the EU Trade Help Desk in the Meet Requirements Section