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WTO Ruling Makes Dumping Duties on Regular Bikes Imported from China More Likely to Continue

Laws & Regulations

GENEVA, Switzerland – Initial reports indicate that the World Trade Organization (WTO) decided that China didn’t automatically qualify for market-economy status in 2016. The Chinese government claimed this. This WTO ruling confirms EU’s dumping policies and makes it more likely that dumping measures will again be announced for the import of regular bicycles from China.

WTO Ruling Makes Dumping Duties on Regular Bikes Imported from China More Likely to Continue
WTO decided against market-economy status for China. Current dumping measures against import of regular bikes likely to continue. – Photo Bike Europe

Currently it’s being investigated whether China is still guilty of dumping conventional bicycles on the EU markets. There are now anti-dumping measures enforced on the import of regular bicycles from China into the EU. These measures expired on June 6, 2018. This expiry triggered a review request by the European Bicycle Manufacturers’ Association (EBMA) in March 2018. With the review request accepted by the  European Commission the anti-dumping measures enforcing a 48.5% dumping duty stayed in place.

Major victory for EU and U.S.

Last week renowned Bloomberg reported that two people with knowledge of the WTO case on officially recognizing market-economy status for China, that the trade organization decided against it. This is considered a major victory for the EU and the U.S. and their trade policies. In particular as this interim WTO ruling will allow nations to have more scope to apply duties against low-cost — or ‘dumped’ — Chinese products on a case-by-case basis, the two people said, who asked not to be identified because the decision is private. China could still settle the complaint before the judgment is made public.

Significant blow to China

The Bloomberg report claims “The WTO decision deals a significant blow to China, which had argued that its 2001 accession to the WTO required members after 15 years to treat Beijing as a market economy, which would reduce trade partners’ ability to curb goods sold below cost. The European Union, which was the defendant in the case, had previously used a non-market economy methodology when calculating anti-dumping duties, which allowed for higher penalties.

“It is demonstrably clear that China has not completed that transition,” the U.S. said in a third-party filing in the dispute in November 2017. “If China wishes for its producers’ or exporters’ prices or costs to be used in anti-dumping comparisons, China should complete its economic transition and ensure that market economy conditions prevail in its economy.”

Next battle

Sources in Brussels commented “We still have to wait for the official publication of the conclusions of the WTO panel. If this is confirmed, it means that the U.S., EU and Japan are right not to consider China as a market economy. The next battle will be to reform the WTO to regulate the immense subsidies programs in China which are at the origin of unprecedented overcapacities and dumping”.

Definitive measures

Regarding the current investigation on whether China is still guilty of dumping conventional bicycles on the EU markets; on June 1, 2019 the European Commission must announce definitive measures. Viewing the WTO decision it’s likely that dumping duties will continue to be enforced.

Looking at the import of regular bicycles originating in China and exported to the EU; it has grown considerably in the past two years. Despite the 48.5 percent anti-dumping duty in place, next to an import duty of 14%, some 300,000 bicycles came from China into the EU in 2015 and 2016. In 2017 that import suddenly showed big increases. According to Eurostat the total of the January – September 2017 import accounted for 466,000 units. The first nine months of 2018 showed a further increase to total of 540,000 conventional bicycles, according to Eurostat.

On what is causing the import growth it’s said that it is due to Made in China bicycles that are destined to be used for public bike rental schemes.

(Source: Bloomberg)

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