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Visiting European Union Trade Commissioner Pascal Lamy said in Beijing on Friday that the EU is cancelling some of the advantages enjoyed by Chinese commodities under the Generalized System of Preferences so that other developing countries can benefit.

He denied that the move was in response to the pressure of the appreciating euro currency on the EU trade deficit with China.

Chinese products have already enjoyed market access to the European Union market under the system and are no longer sensitive to changes in tariff rates, Lamy told reporters at a press briefing after he gave a speech to the EU Chamber of Commerce in Beijing.

The EU has announced it will raise tariffs on Chinese commodities from the current 3.5 per cent to 5 per cent in October.

It plans to exclude Chinese commodities completely from the Generalized System of Preferences in the first half of next year.

The cancellation will affect almost all Chinese exports to the EU, including household electronic appliances, clocks, watches, optical equipment, musical instruments, clothes and other consumer goods.

The Generalized System of Preferences is a scheme under which developed countries grant reduced tariffs to finished and half-finished industrial products from developing countries.

Chinese commodities have become more competitive in the EU under the system. The EU has grown into China's third-largest trading partner and accounted 14 per cent of China's total foreign trade last year.

The EU Trade Commissioner said that the EU drafting of a new rule for registering chemicals is not for protectionist reasons either, because the process is transparent and reflects EU environmental concerns.

He said Brazil, India, Japan and the United States are doing the same thing.

Lamy said only 10 per cent of EU trade is sensitive to exchange rates and that the EU trade policy is not linked to trade deficits.

Appreciation of the euro is a problem for traders and EU exporters but good for importers, especially of energy, he told the media in Beijing.

On Friday, Lamy met Premier Wen Jiabao and Li Changjiang, director-general of the General Administration of Quality Supervision and Inspection and Quarantine. He was due to hold talks with Minister of Commerce Lu Fuyuan on Saturday.

China had a trade surplus of US$9.7 billion with the EU last year and the amount reached US$4.3 billion in the first four months of this year, according to Chinese customs statistics.

China's exports to the euro zone increased by 48.6 per cent year on year to US$16.33 billion in the first four months of this year, a growth rate 15.1 percentage points higher than the country's overall export growth.

Imports from the euro zone rose by 39.6 per cent between January and April on a year-on-year basis, which was 6.4 percentage points lower than the country's overall import growth.

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