The politics of global sourcing: a case study of EU’s trade in bicycles with China and Vietnam

29/03/2012 12:00 - 1503 Views

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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