News: Bike Industry Hit by New Anti-Dumping Duty

Textsize:

Monday, January 12, 2009

BRUSSELS, Belgium - The European Union is about to publish the implementation of a new anti-dumping duty. Last January 6th, the European Commission has sent a final proposal to levy a 85% anti-dumping duty on iron or steel ‘fasteners’ (screws and bolts) originating in China.

Although screws and bolts make up only a small part of the total costs of a complete bike, the impact of this new dumping duty can not be neglected. As a result, the European bike producers are confronted with a forced increase of the cost price. It is not yet clear if this new duty will affect the retail prices of bikes.

Comments Brian Montgomery

Bike Europe asked the bike industry dumping expert Brian Montgomery, Chairman of the European Bicycle Manufacturers’ Association, for further details on this matter. He said: “Reading the various articles on this matter in which a diplomat is quoted, it says this dumping case passed the European Union Dumping Committee recently.”

“There 14 member states voted in favour of the application of a dumping duty, 12 member states voted against it while there was one country that sustained from voting. Because of the close vote in the Dumping Commission it is hard to predict what the European Council will decide.”

January 6, 2009 the European Commission has sent a proposal for ‘Imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China’ to the European Council. The European Council is the main decision-making body of the European Union.

Montgomery continues: “Because of that close vote the Council could decide to return the case to the Dumping Commission for reconsideration. It also depends on the political pressure being applied by China on this matter that is no small deal for China. The country exported in 2007 for euro 575 million in fasteners to Europe.”

After a decision has been made by the European Council, it will be handed back to the European Commission who in this case will formally announce the application of the dumping duty. Normally about two days later it will be published in the Official Journal of the European Union and with that goes into force; also for running orders which have not yet been cleared by customs.

The complaints

The pending new anti-dumping duty is the result of a complaint filed by the European Industrial Fasteners Institute on the imports from non European Community (EC) members (i.c. China) on behalf of the producers of these products located in the EC. The complaint is backed by 86 companies from the EU Member States: France, Germany, Italy, Poland, Portugal, Spain, Sweden and the United Kingdom, representing a total of more than 35% of Community production. This complaint was officially published in November 2007.

The imports of fasteners have grabbed nearly 30% of the EU’s € 4 billion market in fasteners, up from 9% as recently as 2002, the European manufacturers said, bristling at suggestions they were no longer competitive. A spokesman of the producers said that: “We want the EU to impose duties that would more than double the price of Chinese fasteners. If the situation is not re-established in terms of fair competition many companies will be obliged to close down.”

China routinely denies that it breaks trade rules and says European countries resort to protectionism against its low-cost advantage.

“We will provide sufficient evidence to defend ourselves against the fastener dumping allegations from the European Union. Probably we will launch a similar anti-dumping appeal to EU if necessary, said Feng Jinyao, president of the China Industrial Fastener Association to the China Business Daily reported.

“In recent years, we have exported more fasteners to Europe, but the market share is still low”, continued Feng. “It’s no more than 10%. What’s even more is that most sorts of our fasteners are not produced in Europe anymore, so our exports complement the European market, rather than damage its interests.”

The 85% duty will be imposed on all companies located in Peoples Republic of China except for: Biao Wu Tensile Fasteners Co., Ltd. 69.9%; CELO Suzhou Precision Fasteners Co., Ltd. 0%; Changshu City Standard Parts Factory en Changshu British; Shanghai International Fastener Co., Ltd. 63.1%; Golden Horse (Dong Guan) Metal Manufactory Co., Ltd. 26.5%; Kunshan Chenghe Standard Components Co., Ltd. 79.5%; Ningbo Jinding Fastener Co., Ltd. 64.4%; Ningbo Yonghong Fasteners Co., Ltd. 78.3%; Yantai Agrati Fasteners Co., Ltd. 0%; Co-operating companies not included in the sample 77.5%.