BELGIUM/CHINA: European Commission backs plan for anti-dumping taxes for leather shoes from China and Vietnam

The European Commission backed a plan for anti-dumping taxes for leather shoes from China and Vietnam, leaving it up to divided European Union countries to argue over whether to go ahead. EU trade chief Peter Mandelson won support on Wednesday (August 30) from fellow commissioners for five-year duties of 10 and 16.5 percent for leather footwear from Vietnam and China respectively. The proposal needs approval by EU countries within a month, ahead of the October 6 expiry of preliminary duties on the leather shoes. Without backing, the tariffs will lapse. EU countries have split over the duties plan. Some states including the traditionally pro-free trade Nordics argue there is no need for any punitive duties and others countries with shoe industries of their own have called for tougher measures. A majority of anti-dumping experts from EU governments earlier this month rejected Mandelson's proposal. But shoe-making Italy has reluctantly agreed to support the plan and is now pushing other countries also to accept it, arguing the tariffs are the best it could expect to get. A previous proposal for dealing with the Chinese and Vietnamese imports was also rejected by EU member states. Mandelson's spokesman Peter Power said the duty was not intended to make foreign export more expensive but meant as a punitive response to unfair practices. "The average import price of a pair of shoes is 8.5 euros. A duty of 10 percent on that is 85 cents. For Chinese shoes its a little bit more. Our job is to tackle unfair competition where it exists. We have found this in these two cases and that's why we have taken the meaasures we have proposed. The impact of those measures remains to be seen but we are not in the business of making foreign shoes more expensive than European produced shoes," Power said. Mandelson's spokesman said the latest plan was now in the hands of the bloc's 25 governments and there were cases in the past when the views of experts had been overturned by ministers. The Commission said member states who reject the duties could be challenged in court, as in a cotton dispute in 1998. Unlike the provisional tariffs, the five-year duties would also apply to children's shoes after importers were found to be fraudulently importing women's shoes as children's footwear. Specialised sports shoes would be exempt as they are not produced in the EU, the Commission said in a statement. "What we are dealing with here is unfair trade. It is the state involvement in the production of shoes in these two countries. That is something that we cannot accept. It is against world trade rules and we are perfectly willing to take the advantages of their low cost. That is their natural advantage, low labour costs. But they are not, what we cannot accept is that countries then on top up this natural advantage with unfair competitive practices," Power said. The Commission said earlier this year it had evidence of state intervention by China and Vietnam that unfairly helped their exporters, a charged denied by both countries. "This state supported dumping is causing serious injury to European industry. The contraction of European production mirrors closely the rise in under priced imports from China and Vietnam," said Mandelson last February. The measures affect 11 percent of shoes sold in the EU, or nearly 280 million pairs a year based on 2005 imports, and the average extra tariff was 4 euros (1.80 US dollars) per pair, it added. A group representing leading shoe companies, many of which have invested in production in China and Vietnam, said a typical pair of women's boots stood to cost 6.50 euros more, hurting consumers and retailers. The group, whose members include companies and brands such as Timberland, Kickers and Merrell , wants tariffs to be applied only to shoes entering the bloc below a minimum price, sparing their higher-value products.

ITN Source | August 31, 2006

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