Chinese shoemakers and European retailers are threatening legal action after the EU adopted a decision to impose anti-dumping duties against imports of leather footwear from China and Vietnam.
The controversial measures, which will be valid for two years, were adopted by EU ministers on 5 October 2006. Only nine of the EU’s 25 members voted in favour of imposing duties while 12 were against. Nevertheless, with abstentions from four countries counting as ‘Yes’ votes, the measures were passed.
Trade Commissioner Peter Mandelson had initially proposed taking action against Chinese and Vietnamese companies because investigations carried out by the Commission showed that they had been benefiting from cheap bank loans, tax holidays and other government subsidies which had allowed them to export footwear at below-cost prices.
However, European shoe retailers and importers and some member states – in particular the Scandinavian countries – have criticised the way that the Commission carried out its anti-dumping investigation, saying that it was biased from the start, overlooking the impact measures would have for thousands of European workers in the shoe-distribution network and succumbing to intense political pressure from certain member states.
The criteria used during the investigation have also raised concerns; in particular, the use of Brazil as a reference market for comparing prices with China, rather than an Asian country. Member states and shoe retailers and importers say that the choice was “illogical” as it sets the costs incurred by large export-orientated Chinese companies against those charged by small Brazilian factories focusing on the domestic market.
They also say currency variations were not taken into account in the 2005 report.