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Will EU Impose Triple-Digit Anti-Dumping Duty on Chinese E-Bikes?

Laws & Regulations

BRUSSELS, Belgium – Last Friday the European Parliament voted in favour of new EU trade defense rules including a new methodology on how anti-dumping duties should be established. On such duties the European Bicycle Manufacturers Association’s (EBMA) Dumping Complaint document refers to triple-digit dumping margins evidenced by price comparisons with Swiss made e-bikes.

Will EU Impose Triple-Digit Anti-Dumping Duty on Chinese E-Bikes?
EBMA uses in its calculations on dumping margins Switzerland as analogue country. Pictured here is production at Swiss Flyer. – Photo Peter Hummel

EBMA’s dumping calculations are explained in detail in one of the many Annex documents that are linked to the Association’s Dumping Complaint.

Comparing with Swiss e-bikes

In EBMA’s Dumping Complaint the following is said on how the Association established that Chinese e-bike producers are dumping their products on the EU markets: “The dumping calculations are made for the IP (Investigation Period) and on a quarterly basis by comparing the Swiss NVs with Chinese export prices to the EU for the representative product types and for hub and centre engines. The calculations clearly demonstrate that Chinese producers are heavily dumping e-bikes in the EU, with triple-digit dumping margins. The details of the dumping calculations are set out in Annex 22.”

EBMA calculations for lowest and highest dumping margins

In that Annex 22 document it is said that ”This annex contains dumping calculations based on costs of production in China. The Complainant obtained export price quotes with detailed cost breakdowns for each representative e-bike type and hub and centre engines. These quotes show that export prices do not take into account reasonable costs for direct overheads, labour and SG&A (Selling, General and Administrative Expenses), and a reasonable level of profit.

Accordingly, the Complaint has constructed a normal value by adding 14% direct overheads, 4% labour, 1% SG&A and 10% profit (the lower range of the target profit established in this Complaint) to the detailed materials costs. The total EXW costs were compared with the quoted export prices and show significant double digit dumping.”

Annex 22 also says “The Annex contains evidence of e-bikes prices offered by Chinese exporting producers to EU customers in the form of sample quotations. The information is business confidential by its nature. The excel table of the same Annex contains the price information on an anonymised basis. The disclosure of the actual quotes would be of significant disadvantage to the parties providing the information.”

On the basis of that price information by Chinese e-bike exporters EBMA calculated that the lowest dumping margin comes at 193% while the highest dumping margin stands at 430%!

What this will mean for the to be imposed anti-dumping duty when the European Commission’s investigation reaches the conclusion that dumping is taking place, is hard to tell. But what happened last Friday in the European Parliament will play a big role on that.

New methodology for establishing dumping duties

On 17 November the European Parliament has approved by a large majority the introduction of new dumping regulations including new rules on the methodology of how dumping duties are to be established. On that methodology the European Union says “It removes the former distinction between market and non-market economies for calculating dumping. Instead, the European Commission will need to prove the existence of a “significant market distortion” between a product’s sale price and its production cost. On that basis, it will be allowed to set a price for the product by referring for example at the price of the good in a country with similar levels of economic development or to relevant undistorted international costs and prices.”

As stated by the Annex 22 document EBMA uses in its calculations on dumping margins Switzerland as the analogue country.

International trade

In a press release the European Union further states on its new dumping rules that come into force on 20 December 2017, “International trade can be a crucial source of economic growth, but only as long as everybody plays by the rules. With this new anti-dumping methodology, we will have effective tools to  fight dumping in sectors such as steel, solar panels and e-bikes. Our rules are fair, fully in line with WTO requirements and they will apply in the same way to all countries with whom the EU is trading.”

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