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Chapter 1: What is the new EU customs charge on low-value imports?
First, though, a new EU customs charge on low-value imports is set to come into effect next Wednesday, the 1st of July. Supporters argue it will help tackle the flood of cheap goods entering Europe from platforms such as Sheen and Temu, while critics say it will simply add to household costs during a cost-of-living crisis.
The new €3 levy has sparked a debate about consumer protection, fair competition, sustainability... and whether Europe is targeting the right people. Joining me now to discuss this in more detail are Dublin MEPs, Regina Doherty of Fine Gael and Barry Andrews of Fianna Fáil. Good morning to you both. Barry, I might start with you. What problem is this charge of €3 actually trying to solve?
Chapter 2: How do supporters and critics view the new €3 levy?
Good morning, David. I've been campaigning against fast fashion and the effects of the textile industry for many years now, and I called for a levy to try to discourage people from buying huge amounts of textiles mostly from China through these platforms, Xi'an and Timu.
The textile industry is responsible for 10% of global emissions, of global carbon emissions, and it's a completely unregulated industry. And unfortunately, there's no circularity, just 1% of textiles are recycled in Ireland. So something needs to be done. There are 6 billion articles coming into the European Union every year with no charges whatsoever. So it's putting huge pressure on customs.
But whenever I've campaigned on this issue, when I meet people, they say, well, what about the cost of living issue? It's absolutely very important that we have that discussion. I'm sure we'll get into it during the course of this conversation. But I'll just say finally that There are false economies associated with some of these products. They're not sustainable. They're not durable.
And I think that's one of the considerations in this debate.
OK, Regina Doherty, there is a problem, isn't there?
Yeah, actually, we have a number of problems. And I think when the gentlemen and ladies of Ecofin sat down, the problems that they looked at, we've got really unfair competition for our EU businesses, right? We have, obviously, they're trying to compete with much cheaper platforms, and it's very, very difficult, if not impossible. We have an absolute explosion of cheap imports.
As Barry said, nearly 6 billion packages are coming into the EU every single year. Our customs authority just can't cope with that. And as Barry said, 90% of that's coming from China. And in real concern, fast fashion is obviously an issue and we do need to address it. But safety and the compliance of our consumer laws is also a real issue. And then we have the fraud, right?
So we have loads of people pretending that the value of their goods is under... So we've loads of problems to solve. The problem is, is that why are we charging the consumer who's already, you know, living in a cost of living crisis, as again, Barry mentioned, ignoring the fact that we're trying to deal with the cost of living prices in every other aspect of people's lives.
And here we come along and to try and solve the problems that we have, acknowledge that we have them, we're going to charge the consumer again.
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Chapter 3: What problems does the €3 customs charge aim to address?
OK, well, what's the solution then?
The solution is exactly what we are doing. So we're setting up a new EU customs authority. We're working on the legislation. My colleague Dirk from the Netherlands is currently negotiating it on behalf of the parliament. It's going to set up a new data hub. We're going to have less red tape.
We're going to make sure that those people do comply, you know, and that it's the suppliers that will be charged the customs regulation, not the consumer. So I totally acknowledge that we have a problem and we've actually a number of problems and we do need to fix them.
But stop charging the consumer that's just trying to take advantage when they need to spend their money and they need to spend it wisely.
OK, Barry Andrews, does Dutch Dirk have the answer then?
Well, I hope so. This is a temporary measure before the legislation that Regina referred to is brought in. And I think, look, let's be clear, if you add a charge at the supplier level or at the consumer level, ultimately the consumer will pay this. So I think it's, when I called for this levy, I called for it to be applied per package, not per item.
And yet the commission have gone down the road of including it as a per item. So it's It is quite tough. And I am a bit concerned about that. I don't think we want to turn people against it. I think people really want to be responsible consumers. They are concerned about product safety. I mean, 60% of products that have come through these platforms have failed EU standards tests. These are...
strangulation risks for children. These are choking risks for children. And so people do want this to change. I just really hope that this works because it has some flaws as far as I can see.
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Chapter 4: What are the implications of fast fashion on the environment?
OK, well, you're saying you're concerned about people being charged per item, but you actually suggested a levy of five euro.
Yes, I did, per package, not per item. So you have a situation where you could have three or four items in your package below €150, and then you're spending €12 or €15 in addition to the cost of the products. But I really believe when I go around to –
around my constituency and speak to people about this, they absolutely accept that there is a link between the textile industry and global emissions, and we're going through this period of extraordinary heat in Europe at the moment. People are really concerned about that. The fossil fuel industry gets the blame all the time, and rightly so. Agriculture is heavily regulated.
But the third highest global carbon emissions comes from the textile industry and there is nothing being done to try to tackle it. So it's not just the case of legislation. It's also about awareness, making people understand that there is a link between the retail habits, between irresponsible consumption and our climate problems that we absolutely need to address.
Regine, I presume you share Barry Andrews' concern about the charge per item type rather than charge per parcel.
Come here, David, completely. If you have a parent who's buying stuff for their kids going back to school in September, they're not going to get charged three euros for the school bag, the pens, the notebooks, the highlighting markers. Sorry, this is absolutely a crazy decision. If we want to tackle ultra fast fashion, and I do, and Barry is right, then let's tackle the fast fashion companies.
Don't hit the young ones in Dublin buying their clothes online because it's cheaper than the high street in Dublin. We need to make sure that we have fair trading practices right across the EU that apply to absolutely every company selling into the EU.
The owners of the shops on the high street might be quite keen on this charge.
You know, I'm going to tell you, all this is going to do is going to give rise to huge amounts of fraud opportunities. Everybody's now going to be getting text messages next week from the revenue looking for your three euros, your nine euros, your 27 euros.
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Chapter 5: What solutions are proposed to address consumer concerns?
Not ordinary families. And so I think myself and Barry want to read the problems.
But you'll be passed on to the consumer eventually, won't you?
But not in the same way. This is a crude per item charge that's going to make multiples the value of the products that people are buying. And it does nothing to change the practices of the customers.
That's the way all import duties work. You know, when you're checking out for the larger retail outlets.
The vast majority of the products that we're talking about, Barry, are exempt because of the 150 euro rule over the last number of years.
Well, equally, we can't be the only ones holding the de minimis rule. If the US and the UK have gone that way, it's absolutely essential that we do the same thing. But ultimately, the digitalization of supply chains means that it's much easier for customs authorities to be able to manage this new situation. And with 6 billion parcels coming into the European Union,
Every year it's about time we modernised our response to this situation.
Okay, one quick question and a yes or no would probably do it. JP in Sligo says, books imported from anywhere in the world have 0% VAT, which is great when buying from the UK or USA. Will the new rules apply charges on books too? I presume the answer is yes.
They'll apply to everything.
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