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OTTAWA, August 15, 2002 

AD 962
4366-10

Concerning a determination under subsection 76.03(7) of the
Special Import Measures Act regarding

Certain Bicycles and Frames from Chinese Taipei 
and the People's Republic of China

DECISION

On July 31, 2002, pursuant to subsection 76.03(7) of the Special Import Measures Act, the Commissioner of Customs and Revenue determined that the expiry of the order made by the Canadian International Trade Tribunal on December 10, 1997, in Review No. RR-97-003, continuing with amendment its finding made on December 11, 1992, in Inquiry No. NQ-92-002, concerning certain bicycles and frames originating in or exported from Chinese Taipei (formerly designated as Taiwan) and the People's Republic of China, is likely to result in the continuation or resumption of dumping of the goods.

Cet énoncé des motifs est également disponible en français. Veuillez consulter la section  Renseignements .

Table of Contents

1. Summary

2. Background

3. Product

Definition
Description
Classification

4. Participants

5. Case Arguments

6. Bicycle Industry

Canadian Bicycle Industry and Market
China
Chinese Taipei
Frames - China and Chinese Taipei

7. Enforcement of this order

8. Consideration and Analysis

Incidence of dumping while the injury finding was in place
Anti-dumping measures by the authorities of other countries
Changes in sources of imports into Canada
Excess capacity to produce bicycles and frames in Chinese Taipei and China
Other factors

9. Conclusion

10. Procedural Issues

11. Future Action

12. Information

1. Summary

On April 2, 2002, the Canadian International Trade Tribunal (Tribunal), pursuant to subsection 76.03(3) of the Special Import Measures Act (SIMA) initiated an expiry review of its order made on December 10, 1997, in Review No. RR-97-003. This order continued, with amendment, the Tribunal finding made on December 11, 1992, in Inquiry No. NQ-92-002, concerning certain bicycles and frames originating in or exported from Chinese Taipei (formerly designated as Taiwan) and the People's Republic of China. The purpose of the expiry review is to determine whether the order should be continued or rescinded. The order is scheduled to expire on December 9, 2002.

As a result of the Tribunal's decision to initiate an expiry review, the Commissioner of Customs and Revenue (Commissioner) initiated an investigation on April 3, 2002, to determine whether the expiry of the Tribunal's order is likely to result in the continuation or resumption of dumping of the goods. On the basis of the information available, the Commissioner determined, pursuant to subsection 76.03(7) of the SIMA, on July 31, 2002, that the expiry of the order is likely to result in the continuation or resumption of dumping of the goods.

The Tribunal will now conduct an inquiry to determine whether the expiry of the order in respect of the goods is likely to result in injury or retardation to the domestic industry. The Tribunal will make a decision on this matter by December 9, 2002. If the Tribunal determines that the expiry of the order is likely to result in injury or retardation, the order will be continued, with or without amendment. If the Tribunal determines that the expiry of the order is unlikely to result in injury or retardation, the order will be rescinded.

2. Background

An anti-dumping investigation was initiated on May 15, 1992 with respect to certain bicycles and frames originating in Chinese Taipei and the People's Republic of China (hereafter referred to as China). A preliminary determination of dumping was made on August 13, 1992 and a final determination of dumping on November 10, 1992. The Tribunal issued a finding of injury with respect to bicycles with an FOB selling price not exceeding CAD $325, and a finding of future injury with respect to the subject bicycle frames, on December 11, 1992. The Tribunal extended the finding on December 10, 1997, with an amendment. The amendment excluded bicycle frames with an FOB Chinese Taipei or China selling price exceeding CAD $100.

Injury findings or orders expire five years from the date of the injury finding or order unless an expiry review has been initiated. On February 8, 2002, the Tribunal issued a notice of expiry of the order indicating that the above-mentioned order was scheduled to expire on December 9, 2002. The notice of expiry invited opinions from interested persons or governments requesting or opposing the initiation of an expiry review. On April 2, 2002, the Tribunal initiated a review of the order as it was of the opinion that such a review was warranted and provided notice to the Commissioner.

On April 3, 2002, the Commissioner initiated an investigation to determine whether the expiry of the order is likely to result in the continuation or resumption of dumping of the goods. In accordance with the Anti-dumping and Countervailing Directorate's guidelines on the conduct of expiry reviews, interested parties, including the Canadian producers, importers, exporters and foreign governments were requested to provide any information they considered relevant to the Commissioner's investigation.

The expiry review investigation covered all subject goods released into Canada during the period of review, January 1, 1999 to March 30, 2002.

3. Product

Definition

Certain bicycles and frames subject to this review are defined as:

bicycles, assembled or unassembled, with wheel diameters of 16 inches (40.64 cm) and greater, originating in or exported from Chinese Taipei and the People's Republic of China, excluding bicycles with an FOB Chinese Taipei or People's Republic of China selling price exceeding CAD $325, and bicycle frames, originating in or exported from the aforementioned countries, excluding bicycle frames with an FOB Chinese Taipei or People's Republic of China selling price exceeding CAD $100.

Description

A subject bicycle is a two-wheeled vehicle, consisting of a frame, drive train, wheels, a seat, handlebars and brakes, each of which in turn consists of several parts. Bicycle frames are the major component of any bicycle and are normally composed of two triangular structures, made of steel, alloy steel or aluminum, which are either welded together to form a rigid frame or held together by a bolt in the case of suspension frames.

The design, appearance and construction of bicycles have been evolving rapidly in recent years. In addition to steel and its various alloys, frames made of aluminum are becoming increasingly common, as well as front and rear shock absorbers, and disk brakes. The following seven types are currently generally accepted and marketed by the industry: BMX, cruiser, mountain, hybrid, junior, racer and touring bikes, and there is a large variety of models within each type. Types are not rigidly defined, which results in a certain overlap between types of bicycles.

Classification

The Harmonized System (H.S.) provides the following classification numbers under which subject bicycles and frames may be classified:

Bicycles Frames and Parts
8712.00.00.12 8714.91.90.00
8712.00.00.20  
8712.00.00.30  
8712.00.00.40  
8712.00.00.50  
8712.00.00.90  

4. Participants

At the start of the review, the Tribunal issued an initiation notice and an expiry schedule to more than 260 persons including importers, exporters, associations, producers in Canada, the Government of China and the Taipei Economic and Cultural Office. At the same time, any person or government having an interest in the Commissioner's investigation was invited to provide a submission to the Commissioner.

In view of the large number of exporters identified prior to the start of the review, the CCRA limited the number of exporters and importers to be contacted to those representing the majority of subject goods imported into Canada during the period of review. Accordingly, questionnaires were sent to seven exporters in Chinese Taipei and China, accounting for 81% of bicycle exports to Canada, and to nine importers, accounting for 85% of bicycle imports into Canada. With regard to bicycle frames, questionnaires were sent to eight exporters, accounting for 83% of exports to Canada, and to four importers accounting for 85% of imports into Canada.

Other exporters and importers were given the opportunity to participate in the review by way of questionnaires that were mailed to them and their representatives or associations on request.

Submissions were received from four Canadian producers, eight importers and six exporters. They are:

Canadian Producers

  • Cycles Devinci Incorporated
  • Groupe Procycle Incorporated
  • Raleigh Canada Limited
  • Victoria Precision Incorporated

Importers

  • ACS Distributing Incorporated
  • Canadian Tire Corporation
  • Giant Canada
  • Outdoor Gear Canada
  • Specialized Bicycle Components Canada Inc.
  • The Bicycle Group
  • Trek Bicycle Corporation
  • Zellers Incorporated

Exporters

  • A-Pro Cycles Incorporated
  • Giant Bicycle Corporation
  • Krane Corporation
  • Shen Zhen BO AN Bike Company Limited
  • Specialized Bicycle Components Incorporated
  • Trek Bicycle Corporation

Participants are divided into two broad categories, "parties to the proceedings" and "interested persons". Both groups are allowed to file any information that they feel pertinent and may file case arguments and reply submissions. The main difference between the two groups is that counsel for "interested persons" is not permitted access to confidential or protected information, while counsel for "parties to the proceedings" are.

A person is regarded as a "party to the proceeding" if the person has a direct interest in the outcome of the proceeding and actively participates in the proceeding. In an expiry review proceeding, only exporters, importers and Canadian producers may be considered parties to the proceedings.

In this expiry review, all of the companies previously listed were considered parties to the proceeding, as they have a direct interest in the outcome of the proceeding and actively participated in the proceeding.

5. Case Arguments

During an expiry review investigation, all parties to the proceedings and interested persons may submit arguments in writing to the Commissioner regarding the likelihood of resumed dumping should the finding or order be permitted to expire. As well, all parties to the proceedings and interested persons may make reply submissions or rebuttals in response to case arguments made by other parties to the proceeding and other interested persons. Arguments and reply submissions must be based on information that was before the Commissioner on the date the record was closed. In this review, the record was closed on May 22, 2002. Case arguments and reply submissions were received from the following parties:

  • Canadian Bicycle Manufacturers Association (B,R)
  • Specialized Bicycle Components Canada, Inc. (B,R)
  • Krane Corporation, Overlord Industries Corp. and Jonesky Industries Ltd. (B)

Codes: B = Case Brief, R = Reply submission/rebuttal

6. Bicycle Industry

Canadian Bicycle Industry and Market

Groupe Procycle Inc., Raleigh Canada Ltd. and Victoria Precision Inc. are the three major domestic producers of bicycles and frames in Canada. As well, there are several other smaller producers such as Norco Products Limited, Rocky Mountain Bicycle and Cycle Devinci Inc. In 2001, the three major domestic producers, whose production represents almost all of Canadian production, manufactured approximately 707,000 bicycles valued at $84 million.

The total Canadian bicycle market in 2001 was approximately 1.49 million units with imports accounting for approximately 784,000 units or 53% of the Canadian market. China and Chinese Taipei continued to be the two largest exporting countries to Canada, accounting for approximately 486,000 units, or 62% of total imports. Annual imports of bicycles originating in Chinese Taipei and China are currently valued at approximately $80 million, of which $54 million or 68% are subject goods. Table I shows the Canadian market for bicycles from 1999 to 2001.

Annual imports of frames originating in Chinese Taipei and China are currently valued at approximately $6 million. It is estimated, based on the CCRA's enforcement data, that the vast majority of frames imported from China and Chinese Taipei are subject goods.

There has been a large increase in recent years of imports from countries not subject to this order, most notably from Indonesia, Philippines, Thailand, Vietnam and Mexico. In 2001, these imports totalled approximately 205,000 units, or 26% of total imports. The United States of America accounts for most of the balance of imports into Canada.

Table I - Canadian Market for Bicycles - 1999-2001

  1999 2000 2001
Canadian production
Units
Value ($)

761,000
94 million

717,000
88 million

707,000
84 million
Total imports
Units
Value 

652,000
104 million

629,000
103 million

784,000
123 million
Canadian market
Units
Value 

1,413,000
198 million

1,346,000
191 million

1,491,000
207 million
Imports from Chinese Taipei
Units
Value 

133,000
34 million

130,000
38 million

102,000
35 million
Imports from China
Units
Value 

244,000
28 million

236, 000
30 million

384, 000
46 million

China

China's bicycle market and bicycle industry are the largest in the world. The industry in China presently consists of over 1,000 plants1 manufacturing bicycles, components and accessories. The industry employs 300,000 people, and includes state-owned, collectively owned, privately owned and joint venture companies2. About 450 plants are dedicated to the manufacture of whole bicycles, as opposed to parts and accessories. The current production capacity of these plants is estimated to be 70 million units per annum3.

Due to the lower costs of production, new plants are being added, typically as joint venture companies or foreign private investments. A substantial portion of Chinese Taipei's bicycle production migrated over to China in the last ten years.

Bicycles serve as the primary mode of transportation4 for about three quarters of China's population. However, public and private motorized vehicles are slowly replacing them as the population's standard of living increases. The size of the domestic market is expected to slowly shrink in the future, moving in the opposite direction to the standard of living of the Chinese population.

China's industry is suffering from declining export demand, excess manufacturing capacity and a shrinking domestic market. Declining export demand is caused in part by anti-dumping actions initiated against them by various jurisdictions (see "Anti-dumping measures by the authorities of other countries"). For example, the imposition of an anti-dumping duty of 30.6% by the European Communities in 1993 caused exports to that jurisdiction to fall from 1,000,000 units to 19,000 units by 1997.

In 1995, the Chinese industry produced approximately 45 million bicycles. However, as demand for the product declined, both domestically and for export, output fell to 38 million units by 1999. Nonetheless, China remains a major exporter of bicycles. In 1999, the latest year for which figures are available, China exported approximately 23 million bicycles valued at approximately USD $1.1 billion. This volume amounted to about 60% of its total production and constituted some 70% of world trade of the product.

Chinese Taipei

Chinese Taipei's bicycle industry is quite large and technologically advanced. In terms of units of output, the bicycle industry in Chinese Taipei is the third largest in the world, behind those of China and India5.

The Taiwan Bicycle Exporters Association recognizes over 400 manufacturers of bicycles and components, including frames and accessories. The industry is heavily export oriented, typically exporting about 94% of its output. Output, employment, and exports have been declining for years and the pace is accelerating.

In 1999, Chinese Taipei exported 7.8 million bicycles. This volume declined by 38.5% to only 4.8 million units in 20016. The decline is partly due to companies shifting production to China and Vietnam. Although production has shifted to China and Vietnam, the Chinese Taipei manufacturers still maintain their manufacturing plants in Chinese Taipei which suggests that a significant excess manufacturing capacity is still available in Chinese Taipei.

Chinese Taipei's domestic market is tiny by comparison to that of China. Domestic sales in Chinese Taipei are approximately 700,000 units annually. The domestic market is relatively stable in terms of the number of units sold.

Frames - China and Chinese Taipei

Most of the information available in respect of frames is indirect. The statistics that are available for the industry as a whole include complete bicycles, components and accessories. Frames are the main "component" of every bicycle, so it can be stated that the information pertaining to bicycles is relevant to frames. For example, if the Chinese bicycle industry has a capacity to produce 70 million complete bicycles per annum, then it has the capacity to produce at least 70 million frames per annum, not including the production of those companies and

plants that are dedicated to the production of frames only. The same comparison can be made with regards to Chinese Taipei, where approximately 5.5 million complete bicycles were produced in 2001.

7. Enforcement of this Order

The bicycle business in Canada is not only seasonal, but also has regular annual model changes similar to those occurring in the automobile industry. Typically, production is from late fall to spring while the bulk of the shipments are from the winter to early summer. The changeover occurs in September, and the CCRA normally conducts annual re-investigations to coincide with the bicycle trade's shopping season and trade shows pertaining to the model year change.

In response to these annual model changes, the CCRA has developed a system for issuing interim normal values to exporters. Exporters usually apply for interim normal values for bicycles they intend to ship to Canada in the upcoming selling season.

Interim normal values for exporters in Chinese Taipei are established following the normal value methodologies contained in sections 15, 16 and 19 of SIMA. These interim normal values are prospective normal values being valid for one model year and expire each year at the end of August. For each bicycle or frame model year, an interim normal value is calculated based on each Chinese Taipei exporter's projected manufacturing costs for that model, advanced by a mark-up resulting from the previous CCRA re-investigation and adjusted for conditions of trade where warranted. The mark-ups are established on the basis of profitable domestic sales of bicycles in Chinese Taipei. For bicycles and frames from China, normal values are established following the methodology contained in section 20 of SIMA with Chinese Taipei being used as the surrogate country.

Whenever exporters make a request for interim normal values to the CCRA, they are also requested to provide a proposed selling price for each model of bicycle or bicycle frame they intend to ship to Canada in the upcoming season. This enables the CCRA to compare the proposed selling price with the interim normal value that was established for each model. Whenever the proposed selling price for a particular model is found to be lower than its interim normal value, a "potential" margin of dumping is calculated by the CCRA and the exporter is advised of this potential margin of dumping. "Potential" margins of dumping are determined when the exporters' proposed selling price to importers in Canada are lower than their interim normal values, as determined by the CCRA. For example, if a Chinese Taipei exporter had an interim normal value of $100 for bicycle model A and a proposed selling price of $80 for the same model, then the exporter's potential margin of dumping would be 20% for this model (expressed as a percentage of normal value).

This information is very useful to the exporter since the "potential" margin of dumping would be the actual margin of dumping should the exporter decide to keep its proposed selling price to importers in Canada. This gives the exporter an opportunity to assess whether or not to export the goods to Canada. Where the exporter has decided to export the goods to Canada, the exporter has the option of pricing the goods at a level high enough to avoid the assessment of anti-dumping duties (which is normally the case). Should there be disagreement with the interim normal value, a request may be made for a re-determination under SIMA. The CCRA would then review and examine the specific circumstances and information relevant to the importation for which a re-determination has been requested.

For the 2002 bicycle model year, which is in effect between September 1, 2001 and August 31, 2002, 861 bicycle and frame interim normal values had been issued by the CCRA to a total of 31 exporters; 13 located in Chinese Taipei, 16 in China and two in the United States of America (USA). Exporters from the USA must request interim normal values for bicycles from China and Chinese Taipei imported into the USA that are then re-exported to Canada.

8. Consideration and Analysis

Subsection 76.03(7) of the Special Import Measures Act requires the Commissioner to determine whether the expiry of a finding or order in respect of goods of a country or countries is likely to result in the continuation or resumption of dumping of the goods. Pursuant to subsection 37.2(1) of the Special Import Measures Regulations, the Commissioner, in making the determination, may consider any factor specifically identified in paragraphs (a) to (i) as well as any other factors that are relevant to the circumstances.

The following factors were found to be of particular relevance in the present review:

  1. Incidence of dumping while the injury finding was in place
  2. Anti-dumping measures by the authorities of other countries
  3. Changes in sources of imports into Canada
  4. Excess capacity to produce bicycles and frames in Chinese Taipei and China
  5. Other factors

An analysis of each factor follows. The analysis is based on the information contained in the administrative record, which was available to all parties to the proceeding as well as the Commissioner.

Incidence of dumping while the order of injury was in place

The CCRA's enforcement of this order indicates that importations of subject bicycles and bicycle frames were made at normal values for the most part, given the large volume of importations and small amount of dumping duty assessed. For the period, 1999 to 2001, $1.3 million in anti-dumping duty was collected on $142.8 million of subject imports, amounting to 0.9% of total value of subject imports. It can be said that Chinese Taipei and Chinese exporters co-operated with the CCRA's normal value and export price reviews and generally adhered to the interim normal values established by the CCRA.

Table II shows the total number of interim normal values issued by the CCRA for 2002 model year bicycles and frames and their corresponding potential margins of dumping. As can be seen in Table II, 31 exporters applied for 861 interim normal values for bicycles and frames. Of the 861 interim normal values requested, 472 (55%) had proposed selling prices that would have been dumped by an average margin of 28.4%. With respect to Chinese Taipei, 38% of the proposed selling prices would have been dumped by an average of 19.9% while 74% of those from China would have been dumped by 31.7%. The highest potential margin of dumping found at the proposed selling prices was approximately 78% for both China and Chinese Taipei.

Table II - Summary of 2002 Interim Normal Value Requests

    Number of Exporters Reques-
ting Interim NV
Number of Interim NV Reques-
ted
Number of Interim NV Potentially Dumped Percentage of 2002 Interim NV requested Poten-
tially Dumped
( %)
Average Potential Margin of Dumping (%) Highest Potential Margin Found (%)
Bicycles Chinese Taipei 12 312 132 42 19.9 78.2
  China 12 368 311 85 33.1 77.9
  USA. 2 57 0 0 0 0
  Overall 26 737 443 60 29.1 78.2
Frames Chinese Taipei 1 30 0 0 0 0
  China 4 94 29 31 16.5 35.1
  Overall 5 124 29 23 16.5 35.1
Total Chinese Taipei 13 342 132 38 19.9 78.2
  China 16 462 340 74 31.7 77.9
  USA 2 57 0 0 0 0
  Overall 31 861 472 55 28.4 78.2

Table II also illustrates that, at the proposed selling prices, dumping was or would have been found for both bicycles and frames. Had the bicycles and frames been sold to importers in Canada at the proposed selling prices, they would have been dumped by average margins of dumping of 29.1% and 16.5%, respectively.

Summary - The evidence shows that Chinese Taipei and Chinese exporters would resume dumping if the order were allowed to expire. If the order were not in place, exporters would most likely sell at their proposed selling prices to importers in Canada. As Table II illustrates, 55% of the bicycles and frames sold at the proposed selling prices would have been dumped by an average margin of dumping of 28.4%.

Anti-dumping measures by the authorities of other countries

The original Canadian anti-dumping investigation represented but the first of several anti-dumping actions initiated against Chinese Taipei and China in various jurisdictions. The following is a summary of known anti-dumping measures carried out in other jurisdictions.

Argentina instituted anti-dumping measures against bicycles from both countries on November 22, 1995 and renewed the order on August 16, 2000.7 Argentina also made an order respecting various bicycle components in 1998 against both countries.

The European Commission instituted anti-dumping measures against bicycles from China in September 1993 and on January 10, 1997 expanded the scope of the order to include bicycle frames. On February 22, 1999, anti-dumping measures were also instituted to cover Chinese Taipei. These measures were then renewed on July 10, 2000.8

Mexico instituted anti-dumping measures against bicycles from China on September 23, 1999.9

An anti-dumping case was initiated in the United States of America in 1996 against China. Dumping was found, however, material injury could not be established and the case was terminated.

Summary - The anti-dumping measures put into place in several other jurisdictions against China and Chinese Taipei indicate that there is a propensity on the part of exporters from China and Chinese Taipei to dump bicycles and frames on the international market.

Changes in sources of imports into Canada

The evidence indicates that, in the case of countries not subject to the order, imports have generally increased over the course of the order, most notably from Indonesia, Philippines, Thailand, Vietnam, and Mexico.

As illustrated in Table III, the volumes and prices of imports from these five countries have generally increased since the order was made. Given that the order was made on December 10, 1997, the period subsequent to the order, the 1998 period, was also taken into consideration. While the 1998 period is outside of the period of review, information from this period was used to supplement the information available from the period of review for the purpose of providing comprehensive trend analyses.

Total imports from these five countries increased substantially from 63,000 units in 1998 to 205,000 units in 2001. Imports from these countries represented 19% of subject imports in 1998 and 42% of subject imports in 2001.

Table III also illustrates that imports from non-subject countries are growing at a faster rate than imports from Chinese Taipei and China. Imports from Chinese Taipei and China increased by 46% from 1998 to 2001. In the same time period, imports from the five other countries increased by 225%. This increase in imports from these five countries is driven by importers who used to import almost exclusively from China and/or Chinese Taipei, but that have now switched or partially switched their sources of supply. This switch has brought competitive price pressure on Chinese and Chinese Taipei exporters.

In terms of unit pricing Table III shows that, in 2001, all prices from the five countries were lower than the average selling price from Chinese Taipei, at $336 per unit. The high average selling price for goods from Chinese Taipei in 2001 is due to the fact that a large proportion of its exports to Canada are non-subject goods, i.e., above $325 per unit FOB Chinese Taipei. Average selling prices for goods from four out of five countries not subject to this order were lower than the average selling price from China, at $120 per unit in 2001. In fact, Thailand, Indonesia and Mexico had average selling prices that were 30% lower than China's average selling price in 2001.

Table III - Imports from Selected Countries for 1998 and 2001

  1998 1999 2000 2001
Subject Countries Imports (units) $/unit
(CAN)
Imports (units) $/unit
(CAN)
Imports (units) $/unit
(CAN)
Imports (units) $/unit
(CAN)
China 191 000 94 244 000 115 236 000 128 384 000 120
Chinese Taipei 142 000 244 133 000 254 130 000 297 102 000 336
Total 333 000   377 000   366 000   486 000  
                 
Other Countries                
Indonesia 42 000 71 58 000 60 64 000 76 21 000 81
Mexico 8 000 79 6 000 116 11 000 143 51 000 81
Philippines 13 000 104 34 000 93 22 000 108 75 000 114
Thailand     50 000 59 43 000 46 35 000 63
Vietnam     4 000 92 8 000 124 23 000 170
Total 63 000   152 000   148 000   205 000  

Summary - The presence of imports from non-subject countries puts competitive price pressure on exporters located in both China and Chinese Taipei. If the order were allowed to expire, the Chinese and Chinese Taipei exporters would most likely lower their prices to compete against imports from the non-subject countries. These lower prices would lead to a resumption of dumping by the Chinese and Chinese Taipei exporters.

Excess capacity to produce bicycles and frames in Chinese Taipei and China

Excess capacity in China is estimated at approximately 32 million units per annum, or 46% of the total available for production. This is based on the available current production capacity10 and the actual output in 1999. This estimate gives an excess capacity for China that is approximately twenty times the size of the entire Canadian market for bicycles.

Excess capacity in Chinese Taipei is estimated at approximately 3 million units per annum, or 35% of the total available for production. This figure is calculated by subtracting total sales for the year 200111 from total sales for 199912. This figure is probably an underestimate in that the available figures are those of sales, not output at capacity. This conservative estimate gives an excess capacity for Chinese Taipei that is approximately twice the size of the entire Canadian market for bicycles.

Based on the information available, it is expected that both China and Chinese Taipei will continue to have significant excess capacity to produce the subject goods.

Summary - Based on the state of the industry, the market and excess capacity to produce bicycles and frames in China and Chinese Taipei, it is very likely that the Chinese and Chinese Taipei bicycle exporters would resume dumping into Canada if the order were allowed to expire.

Other factors

In response to a question in the expiry review questionnaire asking for other relevant issues to be considered by the Commissioner, Krane Corporation, an exporter of subject goods to Canada made the following statement:

"The Company believes that the dumping ruling under the special import measures act has the merit of stabilizing the price of the subject Bicycles and Frames. If this dumping is to be discontinued when it expires, judging from current economic condition and the over production capacities, the Company believes the Canadian market will be flooded with subject Bicycles and Frames that the cost will be way below existing set normal values."13

Summary - An exporter of subject bicycles predicts that dumping by significant margins would resume if the order were allowed to expire and the volume of imports would be massive. Therefore, it is reasonable to conclude that the dumping from both China and Chinese Taipei would resume if the order were allowed to expire.

9. Conclusion

To summarize, the following points were particularly relevant in the determination:

  • A review of proposed selling prices of subject goods to Canada shows that exporters from both China and Chinese Taipei would resume dumping into Canada if the order were allowed to expire.
  • Anti-dumping measures currently in place in several other jurisdictions, against China and Chinese Taipei, indicate that there is a propensity on the part of exporters from China and Chinese Taipei to dump bicycles and frames in the international market.
  • The recent increased presence of low-priced imports from non-subject countries is putting competitive price pressure on exporters located in both China and Chinese Taipei. If the order were allowed to expire, the Chinese and Chinese Taipei exporters would most likely lower their prices to compete against these imports.
  • Currently, both China and Chinese Taipei have sufficient excess capacity to satisfy the entire Canadian market for the subject bicycles and frames several times over.
  • An exporter of subject goods to Canada has stated that dumping by significant margins would resume and the volume of imports would be massive if the order were allowed to expire.

In conclusion, the analysis of the individual factors demonstrates, overwhelmingly, that the circumstances facing the Canadian market and the global bicycle markets in general, make it likely that exporters from China and Chinese Taipei will continue or resume their past practices of dumping bicycles and frames into Canada if the order of injury on these goods is allowed to expire.

10. Procedural Issues

Normally, the Commissioner will not consider any new information submitted by participants subsequent to the closing of the record date. However, the Expiry Review Guidelines outline the various factors that the Commissioner will consider in deciding whether to accept new information submitted after the closing of the record date. During this expiry review, Norco Products Limited and Liyang Bicycle Industries Corporation submitted new information after the closing of the record date. Having considered the factors contained in the Expiry Review Guidelines, it was decided that this information would not be taken into account or form part of the administrative record for purposes of the determination.

In addition, information submitted by parties and interested persons in an expiry review is subject to the provisions of sections 83 to 87 of SIMA concerning the designation of confidential information and the requirements to provide a public version. The failure to comply with these provisions by counsel for A. Mordo & Son Ltd, who provided a submission on behalf of his client, has resulted in the exclusion of this information from the administrative record and was therefore not taken into account for purposes of this expiry review.

11. Future Action

The Tribunal will conduct its inquiry to determine whether the expiry of the order is likely to result in injury or retardation. The Tribunal commenced its inquiry on August 1, 2002.

If the Tribunal determines that the expiry of the order is likely to result in injury or retardation, the order will be continued, with or without amendment. If this is the case, the CCRA will continue to levy anti-dumping duties on importations of the subject goods that are imported into Canada at dumped prices.

If the Tribunal determines that the expiry of the order is unlikely to result in injury or retardation, the order will be rescinded. Anti-dumping duties would no longer be levied on importations of the goods in question from the date the order is rescinded.

12. Information

For further information, please contact one of the officers identified below:

Mail
Canada Customs and Revenue Agency
Anti-dumping and Countervailing Directorate
100 Metcalfe Street, 11th Floor
Ottawa, Ontario
Canada
K1A 0L8 

Telephone
Steve Fedor (613) 954-7389
Brian Hodgson (613) 954-7237
John Rose (613) 954-7407
Johnny Tong (613) 954-7350

Telefax
(613) 954-2510

E-mail
steven.fedor@ccra-adrc.gc.ca
brian.hodgson2@ccra-adrc.gc.ca
john.rose2@ccra-adrc.gc.ca
johnny.tong@ccra-adrc.gc.ca

Website
www.cbsa-asfc.gc.ca/sima-lmsi/
www.cbsa-asfc.gc.ca/sima-lmsi/

Denis Lefebvre
Assistant Commissioner
Customs Branch

Ottawa, August 15, 2002

Endnotes

1 - Article written by Ji Guang, "A Nation on Wheels: The World's Largest Bicycle Market.", appearing in China Chamber of International Commerce website, undated, Copyright 1998-2001, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1.

2 - Article written by Ji Guang, "A Nation on Wheels: The World's Largest Bicycle Market.", appearing in China Chamber of International Commerce website, undated, Copyright 1998-2001, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1.

3 - Article written by Ji Guang, "A Nation on Wheels: The World's Largest Bicycle Market.", appearing in China Chamber of International Commerce website, undated, Copyright 1998-2001, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1.

4 - Article written by Ji Guang, "A Nation on Wheels: The World's Largest Bicycle Market.", appearing in China Chamber of International Commerce website, undated, Copyright 1998-2001, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1.

5 - India's output consists mainly of rustic bicycles for their domestic market and none are exported to Canada

6 - Special Report by Daphne Chen, "Taiwan Cycle Industry: A Ten-Year Retrospective and a Look Ahead", Bike Market Update, 2002 Spring Edition, appearing in Taiwan Cycle Industry website, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1.

7 - World Trade Organization, Semi-Annual Report Under Article 16.4 of the Agreement, Exhibit 64, p. 880-885, 2001/08/29.

8 - World Trade Organization, Semi-Annual Report Under Article 16.4 of the Agreement, Exhibit 64, p. 889-895, 2001/07/20.

9 - World Trade Organization, Semi-Annual Report Under Article 16.4 of the Agreement, Exhibit 64, p. 950-956, 2001/08/07.

10 - Article written by Ji Guang, "A Nation on Wheels: The World's Largest Bicycle Market.", appearing in China Chamber of International Commerce website, undated, Copyright 1998-2001, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1.

11 - Special Report by Daphne Chen, "Taiwan Cycle Industry: A Ten-Year Retrospective and a Look Ahead", Bike Market Update, 2002 Spring Edition, appearing in Taiwan Cycle Industry website, submitted by Raleigh Canada Limited, Exhibit-64, Appendix-1

12 - Editorial, "The Past, Present and Future of Taiwan's Bicycle Industry (Part I)", appearing in the Taiwan bicycle industry website, Spring 2002. 

13 - Krane Corporation's response to the Expiry Review Questionnaire, Exhibit-44, page 15, Appendix-1