Vietnam Denies Bicycle Dumping

Vietnam Denies Bicycle Dumping

This was affirmed by all Vietnamese enterprises and Dinh Thi My Loan, director general of the Competition Administration Department of the Ministry of Trade, at a press conference in late July. Loan announced to the European Commission that it would conduct investigations into the so-called ‘dumping’ of bicycles and accessories originating from Vietnam into the EU market on April 29, 2004. The EC asked nine enterprises to send documents and answer questionnaires as a basis for the investigation.

Who’s to blame?

Those companies under investigation include six 100 per cent foreign-owned enterprises, namely A&J High Ride Bicycle (Binh Duong province), Vietnam Sheng Fa International (Ho Chi Minh City), Asama Juh Jiun Vietnam (Binh Duong province), Dragon Bicycle Vietnam (Dong Nai province), Liang Industrial (Dong Nai province), Strongman (Dong Nai province) and three local manufacturers, namely Thong Nhat, Xuan Hoa and Le Ngoc Han. The latter has recently merged into the Hanoi Haprosimex Company.

However, statistics from the Vietnam Chamber of Commerce and Industry (VCCI), the agency in charge of granting certificates of origin (C/O) for exports of Vietnam’s enterprises, show that three out of the nine enterprises (Thong Nhat, Xuan Hoa and Le Ngoc Han) have not exported their bicycles or accessories to the EU for several years. 

A more logical argument

Statistic from the Vietnam General Statistics Office demonstrate that in the first quarter of this year alone, the export turnover of bicycles from local enterprises reached US$43 million, an increase of 72 per cent against the same period last year. This is the highest growth rate in export turnover of any of Vietnam’s exports in the first quarter of this year. The investigation conducted by the EC will, however, produce negative impacts on the export turnover of bicycles and accessories.

Statistics from the EU show that the block imported 1.311 million bicycles, equal to 8.2 per cent of the total market. This year, about 1.5 million bicycles are expected to be imported from Vietnam to the market.

According to the lawsuit, the penalty for dumping could be a tariff of 46.24 per cent. The existing import tax rate imposed on Vietnam’s bicycles is 15 per cent.

The Ministry of Trade has cooperated with the Vietnam Motorbike and Bicycle Association, affirming that “the consistent policy of the Vietnamese government is to ensure autonomy and independence for Vietnam’s enterprises and all economic sectors in production and business activities. The government provides no support or subsidies for these enterprises. Vietnam’s enterprises are free for fair competition in domestic and international markets.” The EU’s statement accusing Vietnam of having no market economy is illogical. The Vietnamese government argues that Vietnam has developed the market economy model throughout its whole economy and in the bicycle industry in particular. It is indisputable that enterprises are able to decide on their production costs and prices of their products according to the market’s rules. It is thanks to cheap labour costs, high productivity, and a skilled labour force but not unfair competition that Vietnam’s enterprises can sell their bicycles at low prices.               

ETRA Reacts

The European Two-Wheel Retailers' Association (ETRA) has provided petition documents to the EC opposing the initiation of anti-dumping proceedings against Vietnam. The association asked the EC to dismiss the complaint filed by the European Bicycle Manufacturers Association (EBMA).

Under its petition sent to the EC, ETRA states that if the EU were to introduce anti-dumping measures on Vietnamese bicycle imports, these could well result in a sudden decline of Vietnamese imports into the EU as well as in unfair competition. The association also warned that countries in the EU, which import branded bikes from Vietnam, would greatly suffer from a decline in cheap imports. Importers cannot move from one subcontractor to another just like that and dealers cannot switch from one brand to another without problems. The ETRA concluded that as a result, a number of jobs in the IBD-sector (independent bicycle dealer) hang in the balance.

Along with other lawsuits in the past, this one will be a good lesson for Vietnamese enterprises to be more careful in future export activities.

• Kim Phuong