Trade barriers for remanufactured products
Import restrictions on remanufactured products complicate the whole distribution process in several big world economies
As economies are getting more sustainable, companies often turn to remanufacturing of products in order to save valuable resources, be it material, energy or labour. Used components are sent to a plant where they get restored to their original condition. As a result, they have similar or the same performance and working conditions compared to the equivalent equipment and parts in new condition. Also automotive OEMs get more and more involved in the remanufacturing business.
Unfortunately, the trade in remanufactured products is not always easy from the legal point of view. Some countries forbid the import of waste, second-hand or used goods and do not distinguish remanufactured products from them, which causes unintentional trade restrictions. As a result, high-quality remanufactured products are treated by many legislations as scrap.
In other countries, there are no clear regulations for remanufactured products at all. They are not properly recognized as a special part category and directly addressed by laws. It is very often subject to interpretation of the authorities if a remanufactured part falls under the category of new parts or used products or waste. Even if it does not necessarily mean a trade ban, importers often have to deal with some additional paperwork, get additional licenses or permissions.
Examples of countries which ban the import of remanufactured products are Brazil and Algeria. Serious restrictions can be found e.g. in India, Turkey, Colombia, Argentina or United Arab Emirates.
EU and USA are generally in favour of reducing the restrictions for remanufactured parts worldwide. They try to include legal clauses about them in their free trade agreements (FTAs). A good example is the EU-Vietnam Free Trade Agreement, according to which: “If a Party adopts or maintains import and export prohibitions or restrictions to used equipment and parts, it shall not apply those measures to remanufactured equipment and parts”. Interestingly, a similar provision was first contained in the draft version of the EU-Mercosur FTA but then removed from the final version. Also the free trade agreement between USA, Canada and Mexico contains a similar clause about remanufactured parts.
Trade in remanufactured products requires a deep knowledge of local regulations and the attitudes of local customs authorities. To find out more about the import restrictions for remanufactured products, please do not hesitate to contact us.
