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Taiwan Industry to Target China as Free Trade Agreement Kicks Off for Bikes

Industry- & Retail Organizations

On December 29 China cutted import duties on 557 items imported from Taiwan, including bicycles. Its the second step of the Economic Framework Agreement (ECFA) between China and Taiwan. It spurred the recently elected president of the Taiwan Bicycle Exporters’ Association (TBEA),

Taiwan Industry to Target China as Free Trade Agreement Kicks Off for Bikes

TAICHUNG, Taiwan — On December 29 China cutted import duties on 557 items imported from Taiwan, including bicycles. It’s the second step of the ‘Economic Framework Agreement’ (ECFA) between China and Taiwan. It spurred the recently elected president of the Taiwan Bicycle Exporters’ Association (TBEA), Giant CEO Tony Lo, to call upon the Taiwan industry to ‘establish strong positions in China’.

Tony Lo was elected TBEA president on December 24. He replaces Ying Ming Yang, Kenda’s president, who has held the post for six years. In a speech to the members of the Exporters’ Association, Lo referred to the Economic Framework Agreement between China and Taiwan and mentioned that China has been the world’s most important bicycle market for a number of years. In view of that and the Free Trade Agreement Tony Lo said to the TBEA members that: “Firms must establish strong positions in China.”

China and Taiwan will lower import taxes on more than 800 products under the first trade treaty between the former civil-war foes, an accord that the island called a ‘vitamin’ for its economy. Next to the duties-drop by China on 557 items imported from Taiwan including bicycles; Taiwan will lower tariffs on 267 items such as tea and cement from the mainland.

Whether the Free Trade Agreement will lead to an exodus of bike and bike parts production from Taiwan to China, remains the question. The outcome of the current review of the anti-dumping measures on bicycles and parts imported from China into Europe will be decisive in this matter. A decision on that by the European Commission is expected for the end of 2011.

In the meantime, EU’s new Generalised System of Preferences (GSP), which became effective January 1, 2011, is very favourable to OEM bike makers in countries like Bangladesh, Thailand, Cambodia and Vietnam. The new regulation is big relaxation of the rules for local content as it is set for products made in the Least Developed Countries (LDC’s) at a requirement of just 30% instead of 60% as specified in the old ruling.

For more on the new Generalised System of Preferences (GSP), click here

For more on the Economic Framework Agreement (ECFA) between China and Taiwan click here

 

 

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