EU Gets a Handle on Cambodian Re-Exported Bicycles with New Tariff

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Cambodia_08_-_116_-_Angkor_Thom_(3228076623)The European Union has imposed a 48.5 percent duty on Cambodian bicycle exports to put the brakes on Cambodia flooding the market with Chinese-sourced models dumped in the single market at below cost price.

The tariffs on exports from Cambodia have been imposed in tandem with those from Pakistan and the Philippines. Such levies had also been in place on Indonesia, Malaysia, Sri Lanka, and Tunisia, where companies had allegedly been engaged in trans-shipment and assembly operations only in order to avoid the high rate.

Under the Everything But Arms (EBA) scheme, Cambodia has benefited from a zero-tariff arrangement with the EU. The EU’s tour de force EBA scheme is a part of the Generalized System of Preferences, granting trade relations between the EU and 49 of the world’s Least Developed Countries exemptions from the World Trade Organization’s Most Favored Nation principle. The EBA grants duty free access to the EU single market for all products excluding arms and ammunition.

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The head of the EU delegation to Cambodia Jean-Francois Cautain reportedly said that if standard tariff rates had been applied to the €3 billion of imports from Cambodia in 2014, the EU would have received an estimated €250 million in import duties. Cambodia, Laos, and Myanmar are the only ASEAN countries which benefit from the EBA scheme.

According to the European Commission, companies must wait for one year before appeals against the new tariffs on bicycles will be reviewed. The measures will not apply to all companies, as some have cooperated with the Commission’s investigations. The three exempted Cambodian companies are A&J, Smart Tech, and Speed Tech, as well as Procycle Industrial in the Philippines. Companies reportedly not exempted from the anti-dumping tariffs include Asia Leader International (Cambodia) Co. Ltd. and Opaltech (Cambodia) Co. Ltd., as well as Collie Cycle Inc. in the Philippines.

Related-Reading-Icon-Asean Link RELATED: The Cost of Business in Cambodia Compared with China

The Commission began investigating the issue following complaints from the European Bicycle Manufacturers Association in 2014.

Exports from Cambodia had increased to 1,382,474 units between September 2013 and August 2014, from only 493,874 units in 2011. EU-destined exports from the Philippines had grown from approximately 470,000 in 2011 to 910,000 between September 2013 and August 2014.

The measures against bicycle imports are part of a wider effort to scrutinize Cambodian exports to the EU. Cambodia’s Ministry of Commerce will reportedly carry out surprise inspections of rice millers to investigate alleged mixing of Cambodian rice with rice from neighboring countries, in order for the rice to be re-exported to the EU branded as Cambodian.


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