16 Aug 2018
EU Progresses with Anti-dumping and Anti-subsidy Probes Against Imports of E-bikes from Mainland China, with Definitive Duties Now Expected in January 2019
It was reported on 9 August 2018 that the anti-dumping investigation with regard to imports of e-bikes from mainland China will be concluded, at the latest, by 18 January 2019. Besides deciding on the definitive anti-dumping duties, the Commission will also decide on the retroactive collection of such definitive duties.
On 20 October 2017, the Commission initiated an anti-dumping investigation with regard to imports of “cycles, with pedal assistance, with an auxiliary electric motor” originating in mainland China and falling under CN codes 8711 60 10 and 8711 60 90. The Commission launched the investigation following a complaint lodged on 8 September 2017 by the European Bicycle Manufacturers Association (EBMA). This investigation is said to be one of the EU’s biggest trade defence cases, worth up to 400 million euros.
Two months later, on 21 December 2017, the Commission initiated a separate anti-subsidy investigation with regard to those same imports. According to the European industry, companies from mainland China are benefiting from state aid, including but not limited to forms of cheap loans and grants, subsidies linked to high technological development, and free patent protection, which is felt to be a big cost for European producers.
With regard to the anti-dumping investigation, significant progress has already been made.
First, on 3 May 2018, the Commission published Implementing Regulation 2018/671, making EU imports of e-bikes from mainland China subject to registration as of 4 May 2018. This registration regulation was issued following a request for the registration of imports of e-bikes from mainland China on 31 January 2018.
Second, after mandating the registration of e-bike imports, the Commission imposed provisional anti-dumping duties ranging from 21.8 to 83.6 percent as of 19 July 2018 through Commission Implementing Regulation 2018/1012. While EBMA applauded the provisional anti-dumping duties, stating that this was a critical step for the legitimate defence of the EU industry against unfair competition and that this was necessary to prevent mainland Chinese imports taking over the major share of the EU e-bike market already in 2018, the European Light Electric Vehicle Association deeply regretted the Commission’s decision, stating that this was a clear abuse of the trade defence instruments for protectionist reasons and that importers have been punished before a verdict has even been reached.
Assuming that the provisional anti-dumping duties (imposed on 19 July this year) are followed by definitive duties, the registration of imports allows for the retroactive collection of duties from 4 May 2018.
However, Hong Kong sellers with interests in mainland China should be aware of the fact that two EU importers filed a motion with the EU General Court to strike down the Commission’s decision on registration, thereby seeking annulment of the registration regulation. According to those importers, all evidence collected by the Commission so far shows that the EU industry has not been injured and, quite to the contrary, that the EU industry has managed to increase its sales and production. They also argue that the Commission has infringed their procedural rights, in particular the right of defence and the right to be provided with sound reasons for enacting the registration.
Be that as it may, Trade Commissioner Cecilia Malmström has recently stated that the anti-dumping investigation will be concluded, at the latest, by 18 January 2019. Besides deciding on the definitive anti-dumping duties, the Commission will also decide on the retroactive collection of any definitive duties.
With regard to the anti-subsidy investigation, the Commission is still in the process of collecting all necessary information and conducting verifications. While the deadline for imposing provisional countervailing duties expires on 21 September 2018, the deadline for imposing definitive countervailing duties is 19 January 2019. Taking into account that this is a Saturday, the Commission will likely impose the definitive countervailing duties on 18 January 2019, together with any imposition of the definitive anti-dumping duties.
EU sales of e-bikes, which amount to around 2 million units a year, are projected to increase to 5 million units annually over the next five years. EU e-bike producers fear that without trade defence measures, the growing market will be cornered by cheaper models from mainland China. EU producers have invested heavily in the sector to push innovation in green technology, but claim that the increase in the Chinese market share is making it more difficult for EU producers to remain at the cutting edge.
During 2016, nearly 1.2 million regular e-bikes were imported into the EU from non-EU countries. When comparing this figure to the total imports of regular e-bikes into the EU from non-EU countries in 2015, an increase of more than 60% is observed. Mainland China is by far the main country of origin, representing 79% of all imports of regular e-bicycles from outside the EU.