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Fears Rising in Taiwan on Dumping Duties Circumvention Investigation by European Commission

Laws & Regulations

TAIPEI, Taiwan – Because of the slump in demand for high-end sports bicycles in China, which is affecting Taiwan’s industry, manufacturers are turning to Europe. And even to such extent that it prompted the European Commission to warn the Taiwan government that Chinese-made bicycles are being exported to Europe via Taiwan.

Fears Rising in Taiwan on Dumping Duties Circumvention Investigation by European Commission
Taiwan’s Bureau of Foreign Trade is taking action to prevent bikes made in China being falsely declared as products made in Taiwan, circumventing EU anti-dumping duties when exported. – Photo Bike Europe

Estimates on the drop in sales of high-end sports bikes on the Chinese market say that it amounts to over 30%. This leaves its traces within the Taiwanese bike industry that in recent years heavily invested in the opening of new factories in mainland China.

EU notification to Taiwan government

Recent export data on bicycles shipped from Taiwan do not reflect the slump in demand in China. In fact that data shows a big double digit growth of over 18% in units in the January – August 2015 period. In terms of value Taiwan’s bike export grew by 16.5%. This, as well as other signals from the European industry, must have triggered the European Commission to recently send a notification to the Taiwan government warning for dumping duty circumvention practices with Chinese made bicycles being exported from Taiwan to the European Union.

Action by Taiwan’s Bureau of Foreign Trade

The notification from the European Commission has prompted Taiwan’s Bureau of Foreign Trade of the Ministry of Economic Affairs to take action. These actions are aimed at, “Preventing products made in China from having access to Free Trade Zones for transshipment and being falsely declared as products made in Taiwan, thereby circumventing EU anti-dumping duties and countervailing duties imposed on products made in China, and thus causing the EU to launch anti-circumvention investigations,” says Taiwan’s Bureau of Foreign Trade in a recent online statement.

Special Goods Export Permit

Taiwan’s Bureau of Foreign Trade stipulates now that, “For exportation of bicycles by enterprises in Free Trade Zones and destined for the EU, the enterprises should obtain in advance a ‘Special Goods Export Permit for Enterprises in Free Trade Zones’ issued by the Ministry of Economic Affairs.”

This export permit describes in detail the provisions to which exporters in Taiwan must adhere to.

Prominent Taiwan makers exempted from dumping

Despite the European Commission’s notification and the actions by Taiwan’s Bureau of Foreign Trade there are already some prominent Taiwanese bicycle manufacturers that are able to legally export their products from their Chinese facilities at 0% anti-dumping duty to the EU member states. And as it stands now they will be joined by the world’s biggest bike maker targeting a production of 7 million units of which 2.8 million in China. This is Giant. Their anti-dumping conviction is to be cancelled as the Court of Justice of the European Union ruled last November 26. The EU has two months to appeal the judgment.

Taiwan’s top three bike makers in China

Without the EU lodging that appeal Giant China will be, next to Oyama and Ideal, the 3rd major bicycle producer in China that can export to the European Union at 0% anti-dumping duty. Oyama Bicycles (Taicang) Co. Ltd and Ideal (Dongguan) Bike Co. Ltd are exempted from the June 5, 2013 Council Regulation that imposed a 48.5% anti-dumping duty on imports of bicycles originating in the People’s Republic of China after an interim review.

Giant is Taiwan biggest bike maker; Ideal is the country’s 3rd biggest. The question is now how Merida, Taiwan’s second biggest bike maker that also is operating facilities in China, will react.

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