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EU Lifts Dumping Duty on Vietnam-Made Bikes

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The European Commission has not received a request for a review of the anti-dumping measures concerning imports of bicycles originating in Vietnam. With that the dumping duties which varied from 15.8 to 34.5% on Vietnam-made bikes imported into the European Union were dropped on July 15, 2010.

The anti-dumping duties on Vietnam made bikes were instigated in 2005. They caused the Vietnam export to grind to a halt with the number of bikes exported to the EU declining from about 1.5 million units in 2004 to less than 7,000 in 2009. It also forced a number of Vietnam bike makers into insolvency.

GSP status

Vietnam’s deputy Prime Minister Hoing Trung Hai visited Brussels last June urging the European Commission to consider re-granting Vietnam status under the Generalized System of Preferences (GSP) as well as to end the imposition of dumping duties on bikes and on leather-upper shoes. In case the European Commission decides to grant GSP status to Vietnam, bikes imported from the country into the EU could get import duty free status making them 14% cheaper compared to bikes imported from countries without this GSP Plus status.

After the drop of the dumping duties an import duty free status will bring another bonus for former Vietnam based bike makers to re-start production. Last July the Vietnam Import Export News Channel reported that bicycle manufacturers received the news on the anti-dumping duties removal with optimism. Chau Vinh Chi, a senior executive of Asama Yu Jiun, one of the leading bicycle manufacturers in Vietnam, remarked: “Over the last many years, we have kept in contact with our European clients, and now is the right time for the company to seek orders.” Chi believes that they will be able to receive their first orders in a matter of weeks and it is very likely that, by October, the number of EU export contracts will be equal to 65% of the number five years ago. In 2004 Vietnam exported about 1.4 million bikes to the EU.

Dragon Company is also trying to contact old clients to seek export contracts, and is considering recruiting workers to upgrade production capacity. According to Vu Ba Phu, now that Vietnam bicycles no longer bear anti-dumping duties, its products are more price competitive than Thailand and Indonesia. “Now Vietnamese enterprises can make ¾ of the total bicycle parts needed, while labour costs are much cheaper than other countries, so the prices of Vietnam-made products will be good,” he observed.

As a business, Chi believes that Vietnamese enterprises can resume production at any time, because production lines remain untouched. However, this does not mean that production capacity can return to the high levels of pre-2005. He argued that the biggest problem for bicycle manufacturers is recruiting and training workers. Over the last five years, firms had to lay off thousands of skilled workers. Now workers must be retrained, which will cost a lot of money and time. “It will be not easy to recruit workers now,” Chi admitted.

 

 

by Bike Europe last update:11 Jul 2012

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