ETRA moves against dumping complaint

The European Twowheel Retailers Association joins a long list of organisations, companies and individuals up in arms over EBMAs dumping complaint
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ETRA today lodged their opposition to the current EBMA-inspired dumping complaint being carried out by the European Commission. The final date for lodging such complaints is 15th December.

The Commission now probably has enough facts at its fingertips to reject EBMAs complaint. EBMA may now find itself in a weak position for any future dumping complaints. A case of the little boy who cried wolf, perhaps?

Below we publish the full text of ETRAs position paper.

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Guinardstraat 32 - 9000 Gent

Tel. 0.32.9-233.60.05 - Fax 00.32.9-223.62.40

E-mail: a.roetynck@euronet.be

ETRA Position Paper with regard to the European Commissions notices of anti-dumping proceedings concerning imports of bicycle frames and forks from China and Taiwan and wheels from China

(submitted on 14 December 1999 to the Commission - DGI)


Comment from the point of view of the European independent bicycle retailers

1.

ETRA is the European association for independent two-wheel retailers, representing some 6,500 companies throughout Europe.

We herewith expressly oppose the EBMA-complaint against the import of frames and forks from China and Taiwan and against the import of wheels from China.

We believe that the complaint is inconsistent with the opinion and the position of the majority of the Community producers whom this complaint involves. We believe that the complaint is an attempt by a minority of community producers to obstruct free competition, rather than a true charge against the illicit trade practices as determined in the Council Regulation No 384/96 on protection against dumped imports from non EU-countries.

This belief is based on the following facts:

1. The EBMA statutes state: The association shall be formed of bicycle manufacturers (who are manufacturers of complete bicycles and not just assemblers), who employ a minimum workforce of 80 people, who produce 50,000 bicycles or more per annum in Europe, and whose imports from any country external to the EC or EFTA do not exceed 25,000 bicycles.Consequently, the EBMA is perhaps entitled to act on behalf of those European bicycle manufacturers who produce their own frames, forks and wheels. However, since the EBMA statutes do not allow European producers of frames, forks and wheels to be member of the association, the EBMA does not have a mandate to act on their behalf.

2. As a result, the list of Community producers in Annexe M1 of the non-confidential version of the complaint is not representative for the frame, fork and wheel industry in the EU. It includes no companies which only produce frames, forks and/or wheels. On the other hand, it includes companies which do not produce frames, forks and wheels. This certainly applies to Sparta Rijwielen and Raleigh Industries, which stopped their own frame production some time ago, and to Cycleurope S.A. which is not a producing company but a holding company.

3. Moreover, we question whether the complaint has the legally required support for the following reason. According to our information, of the thirty-two Community producers listed in Annexe M1 of the complaint, at least seventeen have withdrawn their support and have informed the European Commission of that position. It is our belief that the confusion among Community producers about this complaint was partially caused by the questionnaires sent out by the Commission in the course of August 1999.Through these questionnaires the Commission asked the companies concerned for their frame, fork and wheel production in 1998. The third point of the questionnaires stated: Hereby, the company stated in point 1, above, supports the above request lodged by EBMA and authorizes EBMA to act on its behalf in all matters concerning the anti-dumping proceeding. If one reads the second part of this statement, without being well informed on the matter, one could interpret this as if a proceeding has been initiated. For the benefit of objectiveness, the Commission should at least have indicated that they had not yet decided on the initiation of the proceedings. Also, we find it strange that these questionnaires are dated August 1999 and already refer to the above request lodged by EBMA while the notices state that the complaint was lodged on 21 September 1999.

4. Already in our position paper with regard to the anti-dumping proceeding concerning import of Taiwanese bicycles we seriously questioned the sources for the numerical data used by EBMA. Neither public authorities, nor national manufacturers, importers and retailers associations have reliable figures on any aspect of the European bicycle business. If figures are quoted, these can only be based on rough estimations. As a result, the EBMA-complaint contains several inconsistencies. 2.4.1. Although the EBMA does not report the source of the figures given under C-2, page 4 of the complaint, the Taiwanese frame and fork import figures for 1997 and 1998 correspond with Eurostat figures. This does not apply to the Chines frame and fork import. The table below shows the difference between Eurostat and EBMA figures.

Year

Eurostat-figures

Chinese frame import

EBMA-figures

Chinese frame import

Eurostat-figures

Chinese fork import

EBMA-figures

Chinese fork import

1997

1,926,869

2,076,000

3,600,818

3,830,000

1998

2,444,121

2,816,000

3,489,956

4,052,000

4.2. The inaccuracy of the figures given by EBMA also clearly appears from the following. The sum of for instance total frame imports (Annexe B2) and Community production (C5) is 11,747 million in 1998 while EU frame consumption only amounted to 9,649 million frames. Further comparison in the table below:

Year

Sum of EU frame imports and Community frame production

EU frame consumption

1996

12,544,000

11,173,000

1997

12,106,000

10,617,000

1998

11,747,000

9,649,000

4.3. Another error appears from the sum of the market share held by dumped imports (C-3) and the market share held by Community producers (C7). For frames, the two market shares given for 1998 together make up 101.8%. Moreover, in the calculation of these market shares EBMA apparently forgot to take into account that, in 1998, an additional 1,946 million frames were imported from other non EU-countries than Taiwan and China (Annexe B2).4.4. Finally, there is an inconsistency in the employment figures in the complaint under C-8, page 7. The figures do not correspond with the figures given in the EBMA-complaint against the dumping of Taiwanese bicycles. The table below shows the difference.

Year

Employment given in the complaint against Taiwanese bicycles

Employment given in this complaint

1995

15,700

14,700

1996

14,200

13,600

1997

13,800

13,200

Furthermore, we invoke the following arguments against the complaint.

In the past years, European bicycle producers have become increasingly dependent on frames and forks imported from China and Taiwan. If, as a result of possible anti-dumping measures, these imports would be considerably cut back, European producers would not be able to take over for the following reasons. An increasing number of European bicycle manufacturers have decided to switch from own production to purchasing frames and forks. Consequently, production capacity in the EU has become limited. This trend is influenced by, among other things, increasing sales of aluminium bicycles. However, the European production of aluminium frames is also very limited. For this market European bicycle manufacturers are to a very large extent depending on imports from China and Taiwan. Finally, there is hardly any production capacity in Europe for TIG welded frames.

3.

If European producers are unable to take over from China and Taiwan, many European bicycle manufacturers, by lack of frame and fork suppliers, will be forced to close down. As a result, the European bicycle dealers will be confronted with a restricted choice, prices will go up, sales will decrease, which in turn will force retailers to close down.

We wonder how the Commission will establish dumping in this case since, for a considerable part of these imports (for instance aluminium), no well-founded price comparison can be made. Moreover, the European nomenclature for import contains only one code for each of the components concerned. If the Commission would for instance find that only certain frames are being dumped, how will this specific import be singled out?

According to the EBMA, this action is necessary to safeguard the jobs created through frame, fork and wheel production in Europe. However, one should also consider the jobs created through importing, assembling and retailing. These activities provide for a much larger number of jobs than frame, fork and wheel production.In 11 member states independent bicycle retailers account for over 19,000 outlets employing 45,250 people (employers included). These figures do not include Greece, Italy, Spain and Portugal for which no accurate data are available.A number of European bicycle manufacturers who, by lack of frames and forks, will be unable to continue bicycle production will probably switch to the import of complete bicycles. If the non-European suppliers of those bicycles decide not to use European components, this trend will also result in the loss of jobs in the European component industry.According to the EBMA, the alleged dumping causes a knock-on effect of extension of injury to the European parts makers. We seriously question the truth of this statement since COLIPED, the European association for bicycle parts and accessories manufacturers, does not support this EBMA-complaint.

In view of all the above-mentioned arguments, we are convinced that the continuation of the anti-dumping proceedings concerning the import of frames and forks from China and Taiwan and the import of wheels from China, possibly resulting in anti-dumping measures, is to the detriment of European bicycle retailers. Therefore, we call upon the Commission to carefully consider our objections on behalf of European bicycle retailers against the complaint. If the Commission decides to organise a hearing with reference to this case, we would wish to be heard as an interested party.


Jacques Lenel, Annick Roetynck,

President Secretary General

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