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Vietnam: bike makers wary of EC’s anti-dumping duty

Deputy Head of the Ministry of Industry and Trade’s Competition Management Department Vu Ba Phu made the comment at a press briefing in Hanoi on May 28.

Phu said according the EC’s decision issued in July, 2005, its anti-dumping duty of 34 percent against imported Vietnamese bikes will expire on July 15, 2010.

However, the EC may review this duty at the request of the European Bicycle Manufacturers’ Association (EBMA) which seeks the extension of the anti-dumping duties for Vietnam and China for another five years.

According to Phu, if the EBMA’s request is rejected, the duty will end on July 15. Otherwise, the EC will undertake a review over a 12 month period during which the current anti-dumping duty will still be in place until the EU releases the results.

Assessing the performance of Vietnam’s bike industry during a five year period during which the anti-dumping duty was imposed, Phu said the duty has “heavily and negatively” impacted many businesses, pushing them into bankruptcy or to go into another line of business.

For the past five years, exports of made-in-Vietnam bikes to the EU dropped sharply, from 1 million units in 2005 to 21,400 units in 2009.

In 2007 and 2008, Vietnamese bikes accounted for only 0.61 percent and 0.40 percent, respectively, of the EU’s total bike imports.

Vietnam’s bike export revenue from the EU declined steadily, plunging 95.3 percent in 2007 against the figure in 2006.

The EC’s imposition of the anti-dumping duty has also forced Vietnamese bike manufacturers to cut their workforce to 5,000 workers this year from 210,000 in 2005.

Noting that Vietnam’s bike exports to the EU are small and unable “to affect the European bike industry”, Phu stressed that any extension of the duty would be “inappropriate to the growing bilateral trade and economic ties between Vietnam and the EC, especially in the context that Vietnam is sparing no effort to create a more favourable environment for foreign investors, including those from Europe.”

Recently, the Ministry of Trade and Industry sent a diplomatic memo to the EC Directorate General for Trade to analyse the current situation and related developments as well as the impact of the imposition of the anti-dumping duty on Vietnam’s bike industry.

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