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EU Probes Possible Chinese Evasion of Duties on Bicycles

The European Union threatened to extend to Indonesia, Malaysia, Sri Lanka and Tunisia a duty on bicycles from China, saying Chinese exporters may have used the four nations to evade the levy and undercut EU bike producers.

The European Commission opened an inquiry into whether Chinese exporters shipped bicycles to the 27-nation EU via the four countries to avoid paying a 48.5 percent anti-dumping duty. The levy, in place for 19 years, is meant to punish Chinese exporters for selling bikes in Europe below cost.

The request by the European Bicycle Manufacturers Association for the EU to open the probe “contains sufficient evidence that the anti-dumping measures on imports of bicycles originating in China are being circumvented by means of transshipment via Indonesia, Malaysia, Sri Lanka and Tunisia and by means of assembly operations of certain bicycle parts from China via Indonesia, Sri Lanka and Tunisia,” the Brussels-based commission said yesterday in the Official Journal.

Europe is stepping up scrutiny of alleged dumping and suspected trade-distorting state aid to Chinese manufacturers, raising the prospect of more European import duties to protect higher-cost producers. Most of the EU’s punitive tariffs against China penalize exporters for selling products below cost in the bloc and the Asian nation faces more EU anti-dumping duties than any other country.

Bike Subsidies

The EU on April 27 opened a probe into whether Chinese bikemakers receive government aid, a step that may lead the bloc to impose anti-subsidy duties against the country. The commission has nine months from that date to decide whether to impose provisional anti-subsidy tariffs and EU governments have 13 months to decide whether to apply “definitive” levies for five years.

To date, the EU has hit China with anti-subsidy duties only once when, in May 2011, it targeted imports of Chinese paper with levies as high as 12 percent. The five-year tariffs aimed to counter subsidies to China’s exporters of coated fine paper, which is used for books, brochures and magazines.

The bicycle association asked the EU on Aug. 14 to investigate on behalf of three European bike producers including Portugal’s Montagem e Comercio de Bicicletas and Romania’s Eurosport Dhs SA.

The EU said in March it would review the anti-dumping duty on Chinese bikemakers after China last year removed an export-quota system. The bloc said at the time it would consider extending, removing or amending the levy following an investigation that could last as long as 15 months.

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