Posted by Editoress on 09/2/05
On September 1st the Canadian International Trade Tribunal (CITT) released its long awaited report and recommendations on the Global Safeguard Inquiry it has been conducting into the effect of imports on the domestic Canadian bicycle industry. The Inquiry was called because members of the domestic cycling industry (Canadian Bicycle Manufacturer's Association - CBMA) alleged that serious injury was being caused by a sudden and unforeseen increase in imports.
After submissions were made to the Tribunal, they determined that a hearing should be held, and a nine-day public hearing was held June 20 - 24 and June 27 - 30, 2005. During the hearing, witnesses for domestic and foreign producers, importers, mass merchants, independent bicycle dealers (IBDs), the Bicycle Trade Association of Canada (BTAC) and foreign trade associations, a union and the governments of several countries were heard and questioned on the key issues being addressed in the Inquiry.
Based on these hearings and submissions, the Tribunal has released a series of recommendations, which will be submitted to the Minister of Finance. The Minister can implement, modify or reject the recommendations.
Among the key recommendations:
1. Tariffs be imposed on imported bicycles (assembled and unassembled) valued on and below $225 FOB Canadian, which the Tribunals believes to reflect a retail value on and below $400 Canadian. The recommendation is for tariffs to be implemented in 2006 at 30%, dropping to 25% and 20% in subsequent years. NAFTA (USA and Mexico) and other free trade partners (Israel and Chile) are excluded, as are developing nations, with the exception of China, the Philippines, Thailand and Vietnam (due to the quantity of imports). Other exclusions include recumbents, tandems, folding bicycles and certain specific models.
2. A second Inquiry into imported painted frames found that no tariffs should be imposed, because there was no serious injury.
BTAC will issue a more detailed analysis of the Inquiry findings and ramifications for the IBD market next week.
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