EU Bike Makers Strike Back After Start Dumping Review on Import of China Bikes

Soon after the on March 9 announced interim review on the anti-dumping duties for imported Chinese-made bikes (and with that also for parts), initiated by the European Commission, the European bike makers took action.

United in the European Bicycle Manufacturers Association (EBMA), they have filed a confidential complaint at the Commission. In this complaint, which content was published recently by the Financial Times, China is accused of handing out illegal subsidies for its exporting bike manufacturers.

EBMA is also accusing China of re-routing its bike exports to Europe through third countries that benefit from the European Generalised System of Preferences (GSP). The GSP is a trade arrangement through which the EU grants developing countries reduced import duties or a complete duty-free export status.

Export quota system

Why the European government initiated the interim review is explained in a 13 page document. The main reason that is specified here is in the dropped export subsidies for bikes exported from China to Europe. China dropped this "export quota system" as per January 1, 2011.

With the removal of the export quota system the bike exporters in China can now be granted market economy treatment, says the European Commission. This is a vital condition for the abolishment of dumping measures.

Array of unfair competitive advantages

However, the European bike makers are now arguing in their confidential complaint that the export quota system is not the only subsidy that Chinese bike makers are benefiting from. The EBMA claims that the Chinese government has: "Lavished an array of unfair competitive advantages on its bike makers; from preferable loan terms to favourable tax treatment," says the report in the Financial Times.

As said; EBMA's confidential complaint is not only stating that China is still offering unfair subsidies to its bike exporters. There's more. In particular, the accusation of re-routing and re-packaging bikes destined for Europe through third countries. And that by doing so the market share that China-made bikes have in Europe is a lot higher than what the Chinese say it is.

Total import into Europe is remarkable stable

When taking a closer look at the bike imports from the GSP countries into Europe, it shows that this total import is remarkable stable over the years. In the period 2008 to 2011 this total import varies from 4,615,000 units in 2008 to 4,594,000 units in 2011. According to these statistics from the EU data bureau Eurostat, the highest import level was reached in 2010 with 4,770,000 bikes.

These imported bikes came from the following countries: Thailand, Sri Lanka, Indonesia, Tunisia, Philipines, Bangladesh, Cambodia, and Vietnam. However, among these there are some countries that stand out. One of them is Sri Lanka. The bike export from this country to Europe shows a remarkable and questionable growth over the years.