EU Wins Backing for Duties on China's Bikes, Tiles

The European Union is set to impose trade barriers on bicycles and ceramic tiles from China, diplomats said on August 1, 2011, the latest steps designed to protect EU producers.

Plans by the EU Commission to introduce five-year punitive import duties of up to 69.7 percent on the bloc's 275 million euro of imports of Chinese bathroom, kitchen and paving tiles received majority backing from trade diplomats from EU states, diplomats said.

The duties aim to counteract what the EU says is illegal Chinese export pricing that hurts the profit margins of EU producers. They must come into effect by mid-September.

Chinese bicycle and bicycle-part exporters also face an extension until 2016 of existing anti-dumping duties of up to 48.5 percent after a Commission plan won approval from a majority of EU states, diplomats said.

The duty extension, which must take effect by mid-October, is likely to ruffle feathers in China, particularly since an extension had originally been planned to last only three years until 2014.

EU-Chinese trade relations have been strained in recent weeks by a World Trade Organization ruling that gives China fresh power to challenge EU tariffs on goods Europe says are being dumped on its market. A separate WTO ruling against Chinese export curbs on coveted raw materials is likely to be appealed by Beijing in coming weeks.

European bicycle producers, based largely in Germany and Italy, made the case that their business was under sufficient threat from unfair Chinese competition to warrant a five-year extension, the maximum period permitted under EU trade rules.

China exported nearly 700,000 bicycles and had total bicycle-related exports to the EU of 430 million euros ($610 million) in 2009, despite the EU anti-dumping duty.

The duties, first imposed in 1993, have frustrated Chinese attempts to gain greater market share in Europe, where sales of bicycles and parts total about 5 billion euros a year. Duties have gradually increased over 18 years.

The European Bicycle Manufacturers' Association (EBMA), which represents an industry employing around 20,000 people, requested the extension.

SECOND FIBREGLASS INVESTIGATION UNDERWAY

Separately, the Commission launched an investigation into EU allegations of illegal market dumping by Chinese exporters of certain types of fibreglass used in the production of high-tech goods such as light-weight cars.

If trade officials find evidence of price dumping they could introduce temporary tariffs on imports by the end of March 2012, and more permanent five-year duties by September 2012.

"The prima facie evidence ... shows that the volume and the prices of the imported product under investigation have ... had a negative impact on the quantities sold, the level of prices charged and the market share held by the Union industry, resulting in substantial adverse effects on the overall performance and the financial situation of the Union industry," the Commission said in its official register on July 29, 2011.

Prompted by a complaint by the EU Glass Fibre Fabrics Defence Coalition, it is the second time the EU has considered defensive measures to shield EU producers from China, a move likely to prompt opposition from importers and converters in the bloc.

In March 2011, the EU imposed duties on filament glass fibre products but set them at a low rate following fierce criticism by importers, including Denmark's Vestas, the world's largest wind turbine maker.