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EU To Change Anti-Dumping Rules; New Term for China Made Bikes?

Laws & Regulations

BRUSSELS, Belgium – The European Commission has presented a proposal for a new method for calculating dumping on imports from countries where there are significant market distortions, or where the state has a pervasive influence on the economy. Does this mean that the 48.5% anti-dumping duty now in place for China made bikes exported to the European Union will not end by 2018?

EU To Change Anti-Dumping Rules; New Term for China Made Bikes?
Next to new methodology for determining dumping European Commission also proposed strengthening of EU anti-subsidy legislation. – Photo EU

For decades there’s an anti-dumping duty enforced on bicycles imported from China into the EU member states. This has protected the European bicycle sector from a flood of ultra-cheap bicycles from China. With the 2013 renewal of the dumping measures it was widely expected that this would be the final 5 year term. With a new methodology in place for determining dumping as well as a strengthened anti-subsidy legislation there’s a much reduced chance that these measures will be stopped by 2018.

Current realities in international trading environment

An EU press release on the Commission’s proposal says, “The purpose of the new method for calculating dumping is to make sure that Europe has trade defence instruments that are able to deal with current realities – notably overcapacities – in the international trading environment, while fully respecting the EU’s international obligations in the legal framework of the World Trade Organisation (WTO). The proposal, which introduces changes to the EU’s anti-dumping and anti-subsidy legislation, follows a broad public consultation and is accompanied by an impact assessment. The new anti-dumping methodology would apply to cases initiated once the amended rules are in force. The proposal also includes a transition period during which all anti-dumping measures currently in place as well as ongoing investigations would remain subject to the existing legislation.”

New methodology for determining dumping

The EU press release stipulates further, “Under current rules, in normal market circumstances dumping is calculated by comparing the export price of a product to the EU with the domestic prices or costs of the product in the exporting country. This approach will be kept and complemented by the new methodology that will be country-neutral. It will apply the same way to all WTO members and will take into account significant distortions in certain countries, due to state influence in the economy. WTO members will no longer be part of a list of countries subject to the so called “analogue country” methodology. This approach will be reserved for non-market economy countries that are not members of the WTO.”

Anti-subsidy legislation

The Commission has also proposed a strengthening of the EU anti-subsidy legislation so that in future cases, any new subsidies revealed in the course of an investigation can also be investigated and included in the final duties imposed.

In determining distortions, several criteria will be considered, such as state policies and influence, the widespread presence of state-owned enterprises, discrimination in favour of domestic companies and the independence of the financial sector. The Commission will draft specific reports for countries or sectors where it will identify distortions. As is the case today, it will be for the EU industry to file complaints, but they can rely on such reports by the Commission to make their case.

‘Free trade must be fair’

EU Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “Trade is Europe’s best growth lever. But free trade must be fair, and only fair trade can be free. Today we are presenting a proposal to adapt our trade defence instruments to deal with the new realities of over-capacity and a changing international legal framework. More than 30 million jobs in Europe, including 6 million jobs in Small to Medium Sized Enterprises (SMEs), depend on free and fair trade which remains at the heart of EU strategy for jobs and growth.”

European Parliament and Council to decide

The European Commission’s proposal follows orientation debates held in January and July as well as extensive stakeholder and social partner contacts and a public consultation. A full Impact Assessment was conducted to assess the implications of any decision on each Member State and economic sector.

The European Parliament and the Council will now decide on the proposal through the ordinary legislative procedure.

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