How to improve world exchange in the jewellery sector
with particular reference to the United States
Research specially carried out in September 2007 in the United States by the Trade
Associations and by Assicor/Unioncamere, through a specialised company, had
identifi ed the existing possibilities for changing the duties currently levied on the
import of Italian jewellery into the United States. These duties further penalise Italian
products due to the lack of a reciprocal arrangement between the USA and the EU.
Two chapters (chapters 98 and 99) in the Harmonized Tariff System (H.T.S.) had been
identifi ed which, if changed, by passing opportune legislation, could give the results
hoped for by the Italian gold sector.
Specifi cally, chapters 98 and 99 could be unilaterally modifi ed by the United States,
reducing the tariffs applied on the products included therein by eliminating the value of
the precious metal from the calculation of the jewel’s import duty.
Importance of the US market
Despite the growth of emerging markets, the United States is still one of the biggest
markets in the world for gold jewellery, accounting for 18% of total world sales, a
percentage
Italy had been the biggest exporter of gold jewels to the Unites States until 2002, when
new suppliers from India, China and Turkey began to threaten this position.
However, the shares of Italy’s exports to the US market were more markedly reduced
than those involving other markets.
Le quote di export italiano verso il mercato USA si sono però ridotte in maniera più
marcata di quelle verso gli altri mercati.
In the period 2000-2008, Italian exports to the United States fell by 45% while in the
same period (2000-2007) Indian exports to the United States more than tripled from
636 million to 2.2 billion dollars and Chinese exports (including the fi gures for Hong
Kong) were almost doubled, from 734 million to 1.3 billion dollars. These two countries
considerably increased their lead, after having passed the Italian export fi gures in
2004.
The fall in the quota of Italian exports on the US market can be attributed mainly to
competition with countries with lower labour costs on the world markets, to the strong
Euro and the weak Dollar in recent years, and to the presence of a gap in the customs
tariffs. The commercial disadvantages have been further aggravated by the Generalized
System of Preference (GSP), the tariff system which favours the import of goods from
developing countries into the USA. In 2006 nearly 100% of the jewellery products were
imported into the United States from India and Turkey duty-free, as an effect of the
GSP provisions.
The US government revoked the privileges contemplated by the GSP for jewellery
products from India in July 2007, and Indian jewels are now subject to a duty of 5.5%.
Consequently, the percentage of Indian exports fell by 62% in comparison with the
period in which the GSP was in force. In 2007, for the fi rst time in ten years, Indian
exports to the United States showed a reduced trend; this indicates how the revocation
of the GSP has undermined the price advantage of jewellery products on the US
market.
(taken from: Osservatorio del Distretto di Valenza – September 2008)
How to improve exchange with the United Stated of America
The action developed through various phases of research and analysis to evaluate the
actions to be taken to improve exchange with the United States.
A plan was prepared for a change in legislation. This project was then presented to a
number of US deputies who advised and supported the lodging of the proposed change
in legislation with the offi ce in charge of drafting bills at the House of Representatives
of the United States Congress. The fi rst important step contemplated by the research
phase was therefore the lodging with Congress, on 23 January 2008, of the amendment
aimed at modifying the Harmonized Tariff System of the United States. This amendment
contemplates the elimination of the value of the precious metal from the calculation of
the jewel’s import duty.
Specifi c actions were taken in parallel in the US Congress to seek further information
of a legislative nature. In particular, direct and indirect contacts were made with various
Members of the House of Representatives and with two Senators.
During this period, an economic study was carried out concerning the impact of the new
customs legislation.
The research highlighted the reduced impact on the loss of revenue for the US
Government, in comparison with the advantages deriving from the use of raw material
“made in USA”; the advantages for US manufacturers and US distributors of jewellery;
the reduced damage to US jewellery companies due to any reduction in business, as
the loss would be compensated by the benefi ts deriving from the ability to buy at more
competitive prices the products from outside the US which, in the majority of cases, US
manufacturing companies use to complete their sample range. The Ministry for Economic
Development, through the Deputy Minister delegated to International Trade, Adolfo Urso,
has on various occasions expressed keen appreciation for the progress of the research
and the study under way.
Actions to boost awareness have been concentrated during 2009. These actions were
even more necessary to focus attention on the precious goods sector during the
negotiating round of the WTO and to avoid thwarting the efforts made which have resulted
in the following:
- The American Government has fully acknowledged the lack of reciprocity
in the customs tariffs between the US (5.8%) and the EU (2.5%), and
therefore the need to equalise or eliminate the duties between the two
shores of the Atlantic Ocean.
- The American Government has also shown interest in a sectorial venture
within the WTO for the total reduction of tariffs (“0x0”) for the “Gems and
Jewellery” sector.
- The European Commission has acknowledged the importance of the sector
and the need to reduce tariff peaks with the USA in the “jewellery” sector.
- The European Commission (D.G. Trade) has launched an investigation
among Member States to assess the possibility of supporting a possible
sectorial venture within the WTO for the total reduction of tariffs (“0x0”)
for the “Gems and Jewellery” sector. Close assessments are being made
of the possibility of the European Union supporting a voluntary sectorial
negotiation within the WTO also for the “jewellery” sector (as well as
chemicals and machinery) for the total elimination of duties at world level
(operation “0x0”). To launch the “0x0” negotiation a suffi cient number of
Countries must be favourable as to represent at least 90% of a
determined reference index (the mean of the sum of the export and
import quotas). Up to today, a general interest has already been
expressed by 14 countries that represent 75% of the reference value,
among them the United States.
Thanks to the experience acquired, a “technical” hypothesis has become established
during the current year, namely a bilateral EU-USA agreement at customs level in order
to obtain the exclusion of the raw material from the calculation of the duty (Processing
trade). This hypothesis has already been presented and positively evaluated in April, along
with the “0x0” venture, by the Italian Delegation at the International Organisations in
Geneva and by the technical bodies of Confi ndustria (meeting of the Customs Commission
on 6 July 2009). Although it had not yet been formalised at the European Commission,
the Italian Government tried to include the theme among the 10 “key barriers to market
access to the US” during the meeting of the European trade counsellors held on 8 July
2009. The Deputy Minister at the Ministry for Economic Development, responsible for
Internationalisation, On. Adolfo Urso, spoke at the opening ceremony of VicenzaOro
Choice on 12 September 2009, giving great importance to the “pole position” of jewellery
in the sector’s negotiations for customs duty. In line with the decisions taken in the
meeting at the Ministry for Economic Development, during the meeting in Brussels of
the “Article 133 Committee” on 14 October 2009, when the question of the barriers
encountered on the US market was examined, the Permanent Italian Delegation at the
European Union laid particular stress on the “diffi culties of the jewellery sector due to the
different processing trade system which prevents the application of the duty only on the
value of the workmanship, and makes our products less competitive”. The “Article 133
Committee” is the most important technical body of the Council of the European Union
dealing with International Trade. It prepares the decisions of the Council. In commercial
policy, on the basis of a mandate received from the EU Council, after having consulted the
“Article 133 Committee” of the Council (composed of high-level offi cers who are experts
in commercial matters), the Commission is able to negotiate and manage commercial
agreements that involve modifi cations to tariffs, customs and commercial provisions and
protective measures. The same Committee deals with the “Made in ….” fi les.
The theme will be resumed shortly by the “Customs” Commission of BusinessEurope,
the European Confederation that brings together the Industrial Associations of the 27
member countries.