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EBMA Complaint: China Bikes Are Re-Routed for Duty Free Entry in EU

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In its confidential complaint the EBMA claims that bikes made in China destined for Europe are illegally re-routed and re-packaged through third countries. Is there any ground for this EBMA accusation? For that we take a closer look at the 2007 – 2011 bike imports into the EU.

EBMA Complaint: China Bikes Are Re-Routed for Duty Free Entry in EU

 

AMSTERDAM, The Netherlands – In its confidential complaint the EBMA claims that bikes made in China destined for Europe are illegally re-routed and re-packaged through third countries. Is there any ground for this EBMA accusation? For that we take a closer look at the 2007 – 2011 bike imports into the EU.

Overall imports dropped by 881,000 units to a total of 8.5 million bicycles in 2011; 9.4% down on 2010. In 2011 EU’s bike imports from developing countries – to which the European Union grants reduced import duties, or a complete duty-free export status under the Generalized System of Preferences (GSP) scheme, dropped by only 3.7%. This leads to the obvious conclusion that relatively more bikes were imported under the GSP scheme from developing countries. It could also back EBMA’s argument that more and more re-routed and re-packaged China bikes are imported into Europe.

Three GSP countries stand out

Taking a closer look at the changes in EU bike imports from individual countries named in the Top Ten EU Bike Suppliers ranking, three countries stand out. In addition to Taiwan these are Thailand and Sri Lanka. Taiwan doesn’t have GSP status, but Thailand and Sri Lanka do. Under the GSP scheme they are regarded as Least Developed Countries and are granted 10.5% import duty compared to the regular 14%.

The 2011 bike imports from Thailand suffered a lot. They dropped by over 200,000 units or 18.6% compared to 2010. This drop is in line with the decrease in imports from Taiwan. As well, looking at what was imported from Thailand into Europe, the drop could also be explained by a shift to countries that have a complete duty free export status for Europe.

Sri Lanka stands out

This leaves Sri Lanka. What is happening with the EU bike imports from this country really stands out. When looking at the import numbers from 2007 to 2009 it shows that it increased by 72%. This huge growth can be accounted by the fact that during those years Sri Lanka still enjoyed GSP+ duty free export status for Europe. However, the country lost this status in February 2010 due to its internal war with the Tamil Tigers.

The EU ruled that from August 15, 2010 exports from Sri Lanka would still enjoy GSP status but limited to 10.5% import duty. In that same year EU bike imports grew to 1.2 million units and increased by 23.5% compared to 2010. It even increased to a questionable level. Especially when putting the 1.2 million unit export numbers in perspective with the country’s industry and its production capacity. Bike Europe published in its January 2011 edition a Market Report on Sri Lanka. This report said: “Overall Sri Lankan bicycle makers have exported about 900,000 bicycles in 2010 compared to 740,000 in 2009.

Unaccounted for bikes

In fact, according to Eurostat (EU data bureau) statistics, Sri Lanka’s exports to Europe totalled 1.2 million units in 2010 and 973,000 in 2009. This leaves 300,000 bikes unaccounted for in 2010 and 232,000 in 2009. Are these the re-routed and re-packaged China bikes EBMA claims to enter Europe through third countries?

More on this is in Bike Europe’s May issue.

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