Refrain from dubious transactions, local bike firms advised

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Authorities have asked bicycle manufacturers to avoid involvement in fraudulent trade deals that might end up with the European Union imposing punitive measures on Vietnamese bikes again.

The European Commission last month lifted the antidumping duties that it had imposed in 2005 on bikes imported from Vietnam, while retaining them on Chinese imports.

Vu Ba Phu, deputy head of the Vietnam Competition Authority under the Ministry of Industry and Trade, said fraudulent trade typically occurs with bikes that are imported into Vietnam for assembling before being shipped to the bloc.

This is a move designed to obtain Vietnamese certificates of origin, said Phu.

He also stated the ministry has advised regulatory authorities in other ministries to exercise more care in investigating and licensing bicycle manufacturing projects.

He warned that other countries might consider moving bike factories to Vietnam in order to avoid antidumping taxes imposed on them by the European Commission.

The projects that suggest simple assembly chains in their feasibility studies could be a warning sign of attempts to avoid the punitive measures, Phu noted.

He said the commission would re-impose even more stringent punitive measures if they found such violations in bikes imported from Vietnam.

Vietnamese bikes had, since 2005, suffered duties ranging from 15.8 to 34.5 percent. The duties on Vietnamese bikes expired on July 15 and were not re-imposed.

The domestic bike industry has been hit hard by the duties, having to downsize and cut production drastically.

The country's bike exports to the bloc dropped from US$100 million in 2005 to a paltry $1 million last year and the industry's workforce fell from 210,000 to 5,000 people during this period.

It will take about a year for the industry to recover after the duties have lapsed, Phu estimated.

About 30 firms mostly foreign invested businesses are involved in the domestic bicycle industry, from manufacturing accessories and components to assembling the two-wheelers.

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