The politics of global sourcing: a case study of EU’s trade in bicycles with China and Vietnam
29/03/2012 12:00
Jappe Eckhardt - Senior research fellow at the World Trade Institute, University of Bern, Switzerland.
Introduction
During the last two decades, the number of manufacturers in the European Union (EU) that have outsourced (part of their) production to Asia has increased enormously. At the same time there are also stil plenty of firms that produce their products in the EU. These two groups of firms usual y have very different trade policy preferences. As the first type of firms benefit from the inflow of products made in Asia, they would normally prefer liberal EU trade policies vis-à-vis Asian Countries. For the second type of firms the net result of increased EU trade with Asia is overall detrimental and they are, therefore, expected to favour the imposition of trade restrictive measures against Asian imports. This division often leads to intense judicial and political bickering between the two opposing sides.
This paper focuses on one of those sectors in the EU being confronted with increased imports from Asia and, as a result, with repeated political battles among those benefiting and those hurt by external trade: the EU bicycle sector. In particular, the paper looks at two instances of such strife, which both revolved around anti-dumping proceedings initiated by the association representing the (import-competing) bicycle firms in the EU – the European Bicycle Manufacturing Association (EBMA). Following the rapidly increasing influx of Chinese and Vietnamese bicycles into the European market between 2001 and 2004, the EBMA accused both countries of dumping their products on the European market and sent two requests to the European Commission in 2004. First, a request for an interim review of the existing anti-dumping measures on imports from Chinese bicycles. Second, a request for an investigation into the alleged dumping of Vietnamese bikes on the EU market. In case of China this was already the fourth time the EBMA filed an anti dumping complaint (the first one was in 1993), while it was the first ever complaint against Vietnam.
The paper aims at investigating the politics of these two anti-dumping proceedings in detail. To this end, it first focuses on the supply chain of the EU bicycle sector, in order to show which type of firms are active in this sector and to indicate what their interests are with respect to the debates on the trade restrictive measures on Chinese and Vietnamese bicycle imports. It then formulates theoretical expectations regarding the political behaviour of these different bicycle firms during the two anti-dumping proceedings.
Subsequently, the paper tests whether these expectations are correct, by providing a detailed analysis of the role of societal interests during the anti-dumping processes. The paper wraps up with some concluding remarks on the political strategies of import-competing- and import-dependent firms in the EU bicycle sector in general and during the debates on the anti-dumping measures against China and Vietnam more in particular. In this final section, the paper also compares the bicycle sector to some other goods producing sectors in the EU.
Source: http://ssrn.com
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