60 European SMEs request Commissioner Malmström to act against unsubstantiated dumping allegationsLeave a Comment
No less than 60 European SMEs from 13 different EU member states have sent a motivated request to Trade Commissioner Malmström. In the letter, the importing companies explain why the Commissioner should review the Commission’s intention to impose up to 79.3% duties on import of electric bicycles from China. The 60 companies label this plan as “an extremely severe punishment for unsubstantiated dumping allegations”.
The request of the 60 SMEs is being supported by another 27 European companies that are active in the E-bike sector but don’t import electric bicycles from China. They are European producers of components, accessories, LEVs other than e-bikes, but also distributors, dealers, service providers, … All 87 European signatories together employ 1,419 people. The letter has received further support from non-European companies active in the e-bike sector as well as from Chinese e-bike assemblers. The signatories’ list holds a total of 176 names but is confidential.
Unsubstantiated dumping allegations
Dumping measures must always be founded upon three pillars: dumping on the EU market, injury to the EU producers and a causal link between the two. The most important argument for this request to Commissioner Malmström is the fact that the Commission has been unable to establish injury. On the contrary, the Commission itself has established economic performance indicators, which show that the EU producers are fit and healthy[i]:
- Sales volume: + 21%
- Production volume: + 29%
- Production capacity: + 35%
- Employment: + 40%
- Labour costs: -10%
- Profitability: + 25%
- Investments: + 77%
- Return on investment: + 103%
The only extremely weak argument for the Commission to claim injury is the fact that the industry profitability was 3.4% in the investigation period (Sept. ’16 – Sept. ’17), whilst the Commission feels it should be 4.3% as it was in 2015.
Abuse of TDI
The 60 importers conclude that the Commission intends to impose duties up to 79.3% in order to allow the EU industry (31 companies according to the Commission) to increase its profits by a meagre 0.9% (percentage of sales turnover) at the expense of an estimated 150 European SMEs. According to the letter writers, this calls into question the whole economic efficacy of imposing such duties, resulting in extremely high costs and a huge impact on both Union importers and consumers, whilst the benefit to the Union Industry is outright marginal.
The group warns the Commissioner that final duties will have an immensely negative effect on the whole European e-bike sector. Therefore, they call upon her to reconsider the proposed measures, which will only be for the benefit of a handful of EU companies “who are abusing a trade defence instrument to disturb the market and upset competition”.
On 18 December, the EU member state representatives in the Trade Defence Instruments Committee will meet to give their final judgment on the Commission’s proposal. The 60 SMEs have sent the same request to their respective representatives in the TDI Committee. The decision of the Committee on final measures comes under the examination procedure. This means that the committee’s opinion is delivered by a qualified majority (55% of member states representing at least 65% of EU population). All aspects of this Committee’s meetings are confidential.
This letter marks the final effort of the Collective of European Importers of Electric Bicycles supported by LEVA-EU to fight the Commission’s proposal for the imposition of dumping duties. The Collective will now await the Commission’s final decision, announced for January 2019, upon which they will confer on potential further actions.
[i] PP 14-16 of the AD643 General Disclosure Document