Canada: Surtax on Imported Bikes

MONTREAL , Canada (Sep 7) - The Canadian International Trade Tribunal has recommended that Ottawa impose a surtax on the importation of low-cost bicycles from China and several other countries in order to protect Canadian producers. In the decision, the tribunal endorsed the Canadian Bicycle Manufacturers Association, which filed a complaint last February. The CITT recommended that Finance Minister Ralph Goodale impose the levy for three years on bicycles with a retail price of no more than $400. The proposed tax would be 30% in the first year, 25% in the second year, and 20% in the third year. The bicycle association had sought a 48 % tariff. The surtax is primarily focused on bicycles imported from China, Thailand and Vietnam. In its decision, the tribunal said it came to the conclusion "that the accumulated importation of bicycles constituted the main cause of serious damage to national producers." Between 2000 and 2004, imported bicycles increased by nearly 98%. The main victims of the low-cost importations are Procycle of St-Georges de Beauce and Raleigh Canada. They account for more than half of the bikes built in Canada. Meanwhile, the tribunal dismissed a complaint filed by the Canadian manufacturers of bicycle frames, arguing the companies also imported many frames.