EBMA dumps on the trade - BikeBiz

EBMA dumps on the trade

Catastrophe. Disaster. Madness. Stupidity. Massive chunks of the European cycle industry (and ALL bike shops) think EBMAs latest level playing field dumping complaint is pure lunacy
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In a move that could be seriously damaging for the UK bicycle trade just as it could be catastrophic for the cycle industry throughout Europe the European Commission has started anti-dumping proceedings concerning imports of bicycle frames, forks and wheels originating in Taiwan and China. Previous and successful complaints have been won against importation of full bicycles from the Far East.

The latest notice of proceedings follows the anti-dumping complaint filed by the protectionist Paris-based European Bicycle Manufacturers Association in September. The EBMA is headed by Cycleuropes Brian Montgomery, who is also the head of COLIBI. EBMA claim that its members make over 55 percent of the bikes sold in the EU and that their anti-dumping complaint is to give members a level playing field.

Were it to be successful the complaint could lead to massive price hikes. The dumping allegations are based on a comparison of the normal cost of

the products with their export price into the EU. As a control the commission is using the Mexican economy to set the normal cost of Chinese products (which, after all, is a state-controlled economy).

The BA and the ACT are to lobby the EU to drop the complaint. Most of the top-end brands who import frames from the Far East could be affected by any adverse ruling but their UK-based subsidiaries and agents are generally not members of the BA. Their common complaint is: what does the BA do for my company? Heres an answer to that question.

Organisations and companies which wish to fight the anti-dumping complaint have until the middle of December to supply the commission with statements and information. A decision from the EU would then be expected in the Spring.

According to BikeEurope, China and Taiwan account for almost three quarters of

the European bicycle industry's frame import and 80 percent of its forks. Clearly, the trade depends on these imports and dumping duties would be felt far and wide.

In short, if the EU finds in favour of the EBMA, the recent contratemps with the UCI will pale into insignificance. On the one hand Brian Montgomery has been the most vocal critic of the UCIs new regulations and has said they would severely damage the industry, yet on the other hes asking the EU to impose punitive duties on bikes that the European trade relies on absolutely.

However, theres division among European manufacturers. For instance, the American-owned Derby Cycle Corporation, Europe's largest bicycle group, owner of Raleigh, is withdrawing its support of the European Commission's dumping investigation and wont provide information that would be vital to EBMAs case. Derby is in favour of the existing duties on imported complete bikes but as an assembler of Far Eastern frames and components is against duties on loose frames and components.

Derbys move could weaken EBMAs case but it will need suppliers and retailers via their representative bodies to compile a good enough case to administer the knock-out punch.

NOTES:

Heres the text published in the Official Journal of the European Union, issued on

on Friday, 5th November.

The complaint

The complaint was lodged on 21 September 1999 by the European Bicycle

Manufacturers Association (EBMA) (hereinafter referred to as the

complainant) on behalf of producers representing a major proportion,

i.e. more than 55 percent of the total Community production of bicycle frames.

The product

The product allegedly being dumped (hereinafter referred to as the

product concerned) is bicycle frames.

Allegation of dumping

The allegation of dumping for Taiwan is based on a comparison of a

constructed normal value with the export price of the product concerned

to the Community. In accordance with Article 2(7) of the Basic

Regulation, the complainant has based its allegation of dumping in

respect of the People's Republic of China on a comparison of a normal

value in a market economy third country (see paragraph 5(f) below) with

the export price of the product concerned when sold for export to the

Community. On this basis, the dumping margin calculated is significant.

Allegation of injury

The complainant has provided evidence that imports of the product

concerned from the People's Republic of China and Taiwan have increased

overall and in terms of market share. It is alleged that the volumes and

the prices of the imported product concerned have, among other

consequences, had a negative impact on the market share and the level of

prices charged by the Community producers, resulting in substantial

adverse effects on their financial situation and on the employment

situation in the Community industry.

The procedure

The procedure for the determination of dumping and injury. Having

determined, after consulting the Advisory Committee, that the complaint

has been lodged by or on behalf of the Community industry and that there

is sufficient evidence to justify the initiation of a proceeding, the

Commission hereby initiates an investigation pursuant to Article 5 of

the Basic Regulation.

In view of the apparent size and complexity of this proceeding, the

Commission may apply sampling, in accordance with Article 17 of the

Basic Regulation.

Sampling for investigation of dumping

In order to enable the Commission to decide whether sampling is

necessary and, if so, to select a sample, all exporting producers, or

representatives acting on their behalf, are hereby requested to make

themselves known by contacting the Commission and by providing the

following information on their company or companies within 15 days of

publication of the present notice:

-Name, address, telephone and fax numbers, contact person, and the

precise activities of the company with regard to the production of the

product concerned.

-The turnover in local currency and the volume in units of the product

concerned sold for export to the Community during the period 1 October

1998 to 30 Sept 1999.

-The names and the precise activities of all related companies, whether

directly or indirectly related (i.e. companies with which they have an

association or a compensatory arrangement), involved in the production

and/or sale (export and/or domestic) of the product concerned.

-Whether the company intends to claim an individual margin.

-For companies claiming an individual margin, the turnover in local

currency and the sales volume in units for the product concerned on the

domestic market during the period 1 October 1998 to 30 Sept 1999,

and the precise activities of the company with regard to the production

of the product concerned.

-Any other relevant information that would assist the Commission in the selection of the sample.

-An indication of whether the companies agree to their inclusion in the sample which involves replying to a questionnaire and accepting an on-the-spot

investigation at their premises.

In order to obtain the information it deems necessary for the selection

of the sample of exporting producers, the Commission will in addition

contact the authorities of the exporting countries, known exporters and

any known association of exporters.

The Commission may also decide to select a sample of importers. To that

effect, all importers concerned are hereby requested to make themselves

known by contacting the Commission within 15 days of the date of

publication of the present notice.

Any other party concerned which wishes to submit any relevant

information regarding the selection of the sample is also requested to

make itself known by contacting the Commission and to submit the

information with 15 days of the date of publication of the present

notice.

Sampling for investigation of injury

In view of the large number of Community producers supporting the

complaint, and in accordance with Article 17 of the Basic Regulation,

the Commission intends to investigate injury to the Community industry

by applying sampling techniques. The selection of the sample will be

based on the largest representative volume of production and sales of

the Community industry which can be reasonably investigated within the

time available.

In order to obtain the information necessary for the selection of the

sample of Community producers, the Commission will contact associations

of Community producers and/or individual Community producers.

Final selection of samples

The Commission intends to make the final selection of the samples after

having consulted the parties concerned that have expressed their

willingness to be included in the samples. Companies included in the

samples must reply to a questionnaire and cooperate in the

investigation. If sufficient cooperation is not forthcoming, the

Commission will base its findings on the facts available, in accordance

with Articles 17(4) and 18 of the Basic Regulation.

Questionnaires

In order to obtain the information it deems necessary for its

investigation, the Commission will send questionnaires to any

association of Community producers, of exporting producers or of

importers, named in the complaint, and to the authorities of the People's Republic of China and Taiwan. Once the final selection of the samples of the Community producers supporting the complaint, of the exporting producers from the People's Republic of China and Taiwan and, if necessary, of importers has been made, the Commission will also send questionnaires to the companies included in the samples. Exporting producers in the People's Republic of China and Taiwan which submit a request for an individual margin, with a view to the application of

Articles 17(3) and 9(6) of the Basic Regulation, have to submit a duly

completed questionnaire within the general time limit set in paragraph

7(a) of this notice. However, such parties should be aware that if

sampling is applied to exporting producers the Commission may decide not

to grant them an individual margin if it would be unduly burdensome and

would prevent the timely completion of the investigation. Exporting

producers, which wish to submit a request for an individual margin are

therefore invited to contact the Commission forthwith, and in any case

not later than 15 days after the date of publication of this notice in

the Official Journal of the European Communities, to request a copy of

the questionnaire, as their questionnaires have to be completed within

the time limit set in paragraph 7(a) of this notice. Any request for

questionnaires must be made in writing to the address mentioned below

and should indicate the name, address, telephone, fax, e-mail and/or

telex numbers of the interested party. Alternatively, a request for a questionnaire can be addressed to the national authorities.

Collection of information and holding of hearing

All interested parties are hereby invited to make their views known in

writing and to provide supporting evidence. Furthermore, the Commission

may hear interested parties, provided that they make a request in

writing and show that there are particular reasons why they should be

heard. (f) Selection of the market economy third country In accordance

with Article 2(7) of the Basic Regulation, it is envisaged to choose

Mexico as an appropriate market economy third country for the purpose of

establishing normal value in respect of the People's Republic of China.

Interested parties are hereby invited to comment on the appropriateness

of this choice within the specific time limit set in paragraph 7(c) of

this notice.

Market economy status

For those exporting producers in the People's Republic of China which

claim and provide sufficient evidence that they operate under market

economy conditions, i.e. that they meet the criteria laid down in

Article 2(7)(c) of the Basic Regulation, normal value will be determined

in accordance with Article 2(7)(b) of the Basic Regulation. The

Commission will send claim forms to all exporting producers in the

People's Republic of China who have either been included in the sample

or who have requested an individual margin.

Community interest

In accordance with Article 21 of the Basic Regulation and in order that

a decision may be reached as to whether, in the event that the

allegations of dumping and injury caused thereby are substantiated, the

adoption of anti-dumping measures would be in the Community interest,

the Community industry, importers, their representative associations,

representative users and representative consumer organizations may,

within the general time limit set in paragraph 7(a) of this notice, make

themselves known and provide the Commission with information. It should

be noted that any information submitted pursuant to this Article will

only be taken into account if supported by factual evidence at the time

of submission.

General time limits

Interested parties, if their representations are to be taken into

account during the investigation, must make themselves known, present

their views in writing and submit information, unless otherwise

specified, within 40 days of the date of the publication of this notice

in the Official Journal of the European Communities. Interested parties

may also apply to be heard by the Commission within the same time limit.

This time limit applies to all interested parties, including parties not

named in the complaint, and it is consequently in the interested of

these parties to contact the Commission without delay.

Specific time limits

All information relevant for the selection of the samples should be

submitted to the Commission within 15 days of the publication of this

notice, given that the Commission intends to consult parties concerned

that have expressed their willingness to be included therein on the

final selection of the samples within a period of 21 days of the

publication of this notice.

Specific time limit for the selection of the market economy third

country

Parties to the investigation wishing to comment on the appropriateness

of Mexico which, as mentioned in paragraph 5(f) of this notice, is

envisaged as a market economy third country for the purpose of

establishing normal value in respect of the People's Republic of China,

should file their comments within 10 days of the publication of this

notice.

Non-cooperation

In cases in which any interested party refuses access to or does not

provide the necessary information within the time limits, or

significantly impedes the investigation, provisional or final findings,

affirmative or negative, may be made in accordance with Article 18 of

the Basic Regulation, on the basis of the facts available.

Where it is found that any interested party has supplied false or

misleading information, the information shall be disregarded and use may

be made of the facts available.

Review of existing measures

Regulation (EEC) No 2474/93 ( 1 ) imposed definitive anti-dumping duties

on bicycles originating in the People's Republic of China. Following an

anti-circumvention investigation, the Council extended, by Regulation

(EC) No 71/97 (2) the anti-dumping duty on imports of bicycles

originating in China to imports of, inter alia, bicycle frames as

described in Paragraph 2 above, originating in China. These measures

remain in force pending the outcome of a review ( 3 ) initiated pursuant

to Article 11(2) of the Basic Regulation.

Should it be determined that measures are to be imposed on bicycle

frames originating in China in the proceeding initiated by the present

notice, the continued extension of the measures imposed by Regulation

(EEC) No 2474/93 to this product will no longer be appropriate, and

Regulation (EC) No 71/97 would have to be amended or repealed

accordingly. The pending review of Regulation (EEC) No 2474/93 and

Regulation (EC) No 71/97 is presently limited to an expiry review, and

thus an interim review should be opened as regards Regulation (EC) No

71/97 in order to allow any amendment or repeal necessary in the light

of the investigation initiated by the present notice. The Commission,

therefore, hereby initiates, pursuant to Article 11(3) of the Basic

Regulation, an interim review of Regulation (EC) No 71/97. The

provisions set out in paragraphs 5(e), 6, 7(a) and (d), and 8 of this

notice apply mutatis mutandis to this interim review.

Commission address for correspondence:

European Commission

Directorate-General for Trade

DM 24 -- 8/37

Rue de la Loi/Wetstraat 200

B-1049 Brussels

Fax (32-2) 295 65 05

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