Shoe retailers threaten shoe retaliation

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. 

European Trade Commissioner Peter Mandelson said that he did not accept the view that the anti-dumping investigation was unfair and insisted that Brazil was an appropriate reference point. The investigation was “conducted in very strict conformity with very clear rules that were properly applied”, he said, adding that the Commission had the obligation to take action were dumping is identified. 

Chinese Ministry of Commerce Spokesman Chong Quan said: “The anti-dumping measures taken by the EU against Chinese leather shoes lack a legal basis and factual evidence.” He denied that there were any government subsidies to the companies, saying that China had abolished export subsidies after joining the WTO. The Chinese side will closely watch this issue and reserves “the right to take responsive measures”, he added. 

Chinese shoemakers, represented by the China Chamber of Commerce for Import and Export of Light Industrial Products and Arts-Crafts (CCCLA) said that the problems EU's shoe industry faces are not caused by the imports of Chinese-made shoes. They said they would take the necessary measures, in accordance with WTO rules, to safeguard their rights. 

Vietnamese Deputy Minister of Trade Le Danh Vinh said: “Any decision to impose anti-dumping duties on Vietnamese footwear is not only unfair but against the spirit of trade liberalisation that has been initiated and promoted by the European Community. It also runs contrary to the objectives of poverty reduction and hunger-eradication programmes, which the EC has sponsored in Vietnam, and is not in tune with the well-developed relations shared currently between Vietnam and the EU.” 

Paul Verrips, President of the Footwear Association of Importers and Retail chains (FAIR), pointed out that “neither the facts nor Community interest” justified introducing anti-dumping duties and that a number of member states had simply been pushed to abandon their declared positions, “either through bullying or bribes”. He said the “entire investigation is characterised by a variety of procedural errors,” adding: “Currently, we are checking into possibilities for legal action.” 

Despite strong opposition from European shoe retailers and importers, EU ministers decided, on 5 October 2006, to impose punitive duties of respectively 16.5% and 10% on imports of shoes from China and Vietnam, after months of fraught discussions and political lobbying from European shoe-manufacturing countries such as Italy and France. 

Chinese and Vietnamese officials have reacted angrily, affirming that their firms have not been dumping leather shoes on European markets. 

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