Economy

China urge EU to drop anti-dumping duties on bicycle

(Xinhua)
Updated: 2010-12-10 09:05

BRUSSELS - Chinese bicycle makers Thursday urged the European Union (EU) to drop anti-dumping duties which have been imposed on their products for 17 years.

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"The EU bicycle industry does not merit the protection of further extension of anti-dumping measures targeting Chinese imports," representatives of Chinese bicycle manufacturers said in a statement before attending a hearing held by the European Commission Thursday on whether to keep the duties in place for another five years.

The EU imposed anti-dumping duties on imports of bicycles originating in China since 1993 following the allegation of the European Bicycle Manufacturers Association (EMBA) that Chinese bicycle producers were dumping in the EU and squeeze them out of the market.

The duties were rolled over twice in 2000 and 2005 following confirmative findings of the commission through expiry investigations, standing as one of the longest EU anti-dumping measures against Chinese products.

EU anti-dumping measures are usually imposed for five years. They expire automatically, unless a review is initiated and determines that if they were to expire, dumping and injury would probably continue or recur.

During the past 17 years, various initiatives were also taken by EMBA to extend the scope of measures to cover also bicycle parts and to increase the duty level.

The duty rate was initially set at 36 percent and raised to 48.5 percent in 2005, effectively reducing imports of Chinese bicycles from over three million annually in early 1990s to around 700 thousand now.

In view of the oncoming expiry of the measures this year, EMBA motivated another complaint, requesting the EU to extend the anti-dumping duties for another five years. An expiry review investigation was thereafter launched in July.

"The allegations of EMBA are misleading and unfounded," said Zhang Peisheng, senior commissioner from China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), who led the Chinese delegation.

Eric Jiang, a lawyer representing the Chinese manufacturers, disputed the injury claim raised by the EU bicycle industry. He said the EU industry actually enjoyed higher profitability and larger market share despite the economic crisis and rising competition.

"The European manufacturers managed to sell at a price of 20 percent higher in 2009, as compared to what they did five years ago," he said.

Figures from COLIBI, a European two-wheeler parts and accessories industry association of which EMBA is a member, showed that "despite the big competition with Asian imports the European bicycle industry is still strong, producing more than 60 percent of the (EU) market consumption."

"For Chinese bicycles producers, there is anything but a case of injurious dumping of Chinese imports in the EU," said Liu Pengxu, vice director of legal department at CCCME.

Zhang said the 17-year-old duties have shielded EU manufacturers from global competition and reduced the incentive for them to be more competitive.

"Hardly did they take effectively any steps in restructuring the industry and improving their cost efficiency, which naturally leads to their fear of competition from China," he said.

"Instead, they are used to and expect again this time that the European Commission will come to its rescue by another five years' duties against China, to defer 'indefinitively' the inevitable day when it has to address its own internal inefficiencies and failings."

Lack of competition means European consumers have to pay an unjustifiable higher price, merely to make the inefficient and uncompetitive industry survive, and they are deprived of better choice.

The average price for a bike sold on the EU markets is roughly one third higher than that in the United Stated, according to Zhang.

Zhang said the anti-dumping measures also ran counter to "green transport" campaign inside the EU.

"It is well in the interest of the EU as a whole to reintroduce the competition in the EU and pass on the welfare to the public who are concerned about the environment. The EU decision-maker will have to take the right direction based on the true merits," he said.