Leva

LEVA-EU calls on EU assemblers for support to end dumping duties on bicycle parts

59 days ago

6 minutes

The anti-dumping measures on conventional bicycles from China are to expire on the 30th August 2024. The measures are now in their 31st year. In 1997, they were extended to essential bicycle components based on alleged circumvention. Those measures are now in their 27th year.

There is no doubt that EBMA has already or will very soon request the Commission to review the measures against conventional bikes with a view to continuing them for another 5 years. To gather the necessary support for their request, they visit bike assemblers up and down the continent, inviting them to co-sign the request for the review. In doing so, they will undoubtedly explain how it is necessary to continue the measures to avoid Europe being flooded with cheap Chinese bicycles, which would undoubtedly destroy European assemblers. They will add that the measures will allow production to be brought back to Europe and will create jobs.

The other half of the story

However, that is only half the story. LEVA-EU hereby invites all European assemblers to think carefully before explicitly expressing their support for EBMA’s request. After all, the other half of the story goes like this.

The anti-dumping measures against bicycles from China were expanded in 1997 to include essential bicycle parts. Anyone who assembles in Europe must be able to prove that no more than 59% of the value of their components comes from China or that at least 25% value is added in the assembly. Anyone who can prove this will receive an exemption from the European Commission, meaning that 48.5% duties will not be levied on bicycle frames, forks, gears, sprockets, brakes, wheels and handlebars from China.

When ADD and ASD were levied on electric bicycles in 2018, this had a major impact on the duties on essential bicycle parts. European assemblers who use essential bicycle parts for electric bicycles could also receive an exemption if they proved that they used the parts for electric and not for regular bicycles. Please note that the Commission has not (yet) extended the rights to essential bicycle parts for the European assembly of electric bicycles. Many European assemblers make electric bicycles of which the value of the components amounts to more than 59%. In some cases, the electric bicycles even consist of 100% Chinese components. The European assembly sector cannot do without these Chinese components because the availability of parts outside China is too limited to meet full demand.

To circumvent or not to circumvent, that is the question.

The EBMA’s request to the Commission to extend the duties on bikes to essential bicycle components, came almost immediately after the imposition of the duties on bikes, alleging massive circumvention by China. In the case of electric bicycles however, EBMA misses no opportunity to assure European assemblers that they can use as many Chinese parts as they want. And so, companies are happily assembling in a way that, according to the law, can very easily give rise to anti-circumvention measures.

It is bizarre, to say the least, that while the European Commission responded to EBMA’s request without hesitation for conventional bicycles, the same Commission now simply ignores the situation, even though they could initiate an investigation at their own initiative. After all, why would the Chinese, accused of massive circumvention for conventional bikes, not resort to the same solution for electric bicycles.

LEVA-EU calls on all assemblers in the EU to treat the EBMA reassurances with utmost caution. In reality, not everyone who assembles in Europe appears to be safe, as EBMA pretends. While the Commission is not currently interested in possible circumvention, some assemblers have indeed been attacked, more specifically by customs services. They determine that insufficient value is added in the assembly, upon which they categorize the import of parts as the import of a complete electric bicycle to which anti-dumping and anti-circumvention duties apply. With this alleged circumvention, the company is committing a criminal offense for which not only arrears are charged, but also extremely heavy fines and possible prison sentences. It will take 5 to 10 years to reach a conclusion in the case. During that period, given the extremely serious threat, it is impossible for the company to grow even if it is ultimately acquitted.

Pushing businesses straight into the abyss

So, when you sign certain EBMA requests to the Commission, which are allegedly intended against China and for Europe, keep in mind that this will not necessarily protect you from customs actions that may push your business straight into the abyss. As mentioned, LEVA-EU has no position on the dumping measures against conventional bicycles. As for the extension of the measures to essential bicycle parts, we say loud and clear: in the interests of European assemblers, these measures must be terminated as quickly as possible. No European company benefits from a legal restriction on the use of Chinese parts, nor from a very complex and expensive administration to enforce that restriction.

LEVA-EU strongly hopes that European assemblers will consider this call and will no longer support EBMA requests that result in the continuation of the additional measures on essential bicycle parts from China.

There is another important reason to terminate the duties on essential bicycle parts. That legislation makes it virtually impossible for new electric bicycle assemblers to enter the market. To obtain a Commission exemption or end-use approval, they must first pay 48.5% anti-dumping duties on essential bicycle parts from China. This is completely unacceptable because legally there are no anti-dumping duties on essential bicycle parts for electric bicycles.

Which start-up can afford to include an additional cost of 48.5%, that serves no purpose and even has no legal basis, in their business plan? And to get rid of that 48.5%, which is not reimbursed in the case of end-use authorizations, they must provide significant guarantees!

This makes EBMA’s claim that anti-dumping measures against electric bicycles from China are necessary to reshore production and to create jobs an outright lie. You may think that it is a good thing for your company if it is difficult for new companies to enter the market. Restriction of competition inevitably results in a reduced, thus less attractive offer and higher prices that ultimately leads consumers to quit. That response will eventually affect all remaining companies, including yours.

LEVA-EU acknowledges that this is a complex matter and remain therefore at the disposal of anyone seeking further clarification: annick@leva-eu.com, tel. +32 475 500 588.

Photo by Lance Grandahl on Unsplash

Annick Roetynck

Annick is the Manager of LEVA-EU, with decades of experience in two-wheeled and light electric mobility.

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