Dumping
Evidence showed that the Chinese and Vietnamese shoe manufacturing sectors had benefited from state-backed cheap financing, non-market land rents, tax holidays and improper asset valuation. This allowed them to export shoes to the EU at a price lower than the market value proper competitive market circumstances would dictate – amounting to ‘dumping’.
The Commission estimates that the resulting tripling of imports from the two countries over the past four years has caused the closure of 1000 footwear companies, the loss of 40,000 jobs and a drop in production of 30%.
The EU is empowered to impose anti-dumping duties in such circumstances by the Anti-dumping Regulation of 1996, which implements World Trade Organisation (WTO) rules. The Commissioner’s recommendation has to be endorsed by the member states.
Exemptions
The Commissioner will recommend that childrens’ shoes and top-of-the-range special technology advanced footwear (STAF) (i.e. high-tech sports shoes) be exempted from the duties. He was unwilling to impose a possible burden in the way of higher prices on families with children and the number of STAF sport shoes manufactured in the EU was too small to warrant anti-dumping duties.
The staggered imposition of duties was set to take into account goods already in transit.
Impact of the measures
The Commissioner did not anticipate any or any significant increase in the price of shoes on the retail market.
In the Commission’s estimation the duties will effect only 9 out of every 100 shoes sold in the EU and would amount to a sum of just €1.5 added to the average €8.5 wholesale price. Such shoes retail at between 30 and 100 euro. Since, in the view of the Commissioner, dumped wholesale prices had not, since 2001, been reflected in the retail price charged to consumers, there would be ample margin for importers and retailers to absorb any price increase.
