EU Plans to Renew 48.5% Tariff on Chinese Bikes for Three Years

The European Union plans to renew a tariff on bicycles from China to help EU producers including Accell Group (ACCEL) NV compete with cheaper imports, a step that would extend 18-year-old trade protection.

The EU intends to re-impose the 48.5 percent duty to punish Chinese exporters of bicycles for selling them in the 27-nation bloc below cost, a practice known as dumping. In a concession to Chinese manufacturers and European importers, the extension would be for three years rather than the usual five years.

“The anti-dumping measures on bicycles should be maintained,” the European Commission, the EU’s trade authority in Brussels, said in a draft decision obtained by Bloomberg News. “It is appropriate to limit the current measures to three years.”

European trade protection against Chinese bicycles dates to 1993, when the EU introduced a 30.6 percent anti-dumping duty on imports from China. The bloc renewed that levy in 2000 before raising it to the current 48.5 percent in 2005 at the same time as introducing anti-dumping duties as high as 34.5 percent on imports from Vietnam.

The EU let the levies against Vietnam expire a year ago while opening an investigation into whether to renew the 48.5 duty against China, a step that automatically kept the measure in place at least for the duration of the probe. The plan for a three-year extension, which must be approved by EU governments by mid-October, is the outcome of the inquiry.

Three-Year Renewal

The investigation resulted from an April 2010 request by the European Bicycle Manufacturers Association, which claimed that letting the trade protection against China lapse would likely result in a continuation of dumping by Chinese bike exporters and a recurrence of injury to EU producers, according to the commission. About 20 million bicycles are sold in the EU annually.

China’s share of the EU bicycle market fell to 3.1 percent in the 12 months through March 2010 from 4.4 percent in 2007, the commission said in its proposal for a three-year renewal of the duty. China is the world’s largest bike manufacturing country with production of about 80 million bicycles, of which 55 million are for export, according to the commission.

John Clancy, the commission’s trade spokesman, wasn’t immediately able to comment on the planned duty renewal when reached today by telephone.

To contact the reporter on this story: Jonathan Stearns in Brussels at jstearns2@bloomberg.net

To contact the editor responsible for this story: Leon Mangasarian at lmangasarian@bloomberg.net

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