EU threatens to renew tariffs on footwear from China, Vietnam
06-OCT-2008 Intellasia | Bloomberg
Oct 6, 2008 - 7:00:00 AM
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The European Union threatened to re-impose tariffs on shoes from China and Vietnam over the objections of EU consumers, seeking to protect Italian, Spanish and Portuguese producers.
The EU opened a review into whether to let lapse the duties of up to 16.5% on Chinese and Vietnamese leather footwear. The levies, which were due to expire October 7 after two-years, will now automatically stay in place for as long as 15 months while the EU examines whether to re-apply the trade protection to counter below-cost --or "dumped'' --imports.
The review "will determine whether the expiry of the measures would be likely, or unlikely, to lead to a continuation or recurrence of dumping and injury,'' the European Commission, the 27-nation EU's regulatory arm in Brussels, said today in the Official Journal.
The case risks reopening a split in the EU over the need to shield 8,000 leather-shoe manufacturers, mainly small businesses in southern Europe, from cheaper imports. Four-fifths of the bloc's leather shoes come from Italy, Portugal and Spain, which face objections to the trade protection from northern nations.
The EU's 2006 decision to impose the levies on 9.7 billion euros (US$13.4 billion) of Chinese and Vietnamese footwear for two-years was a compromise because such anti-dumping measures usually last for five years. The levies are 16.5% for China and 10% for Vietnam.
More than 40,000 Vietnamese workers have lost jobs since the EU imposed the duties, the Vietnam Leather and Footwear Association said in September. Vietnam's concerns have been echoed by EU retail and consumer groups.
Price increases
"Consumers, who already face huge price increases, namely in the food and energy sectors, have had to pay the bill for long enough,'' Monique Goyens, director general of the European Consumers' Organisation, said October 2. "The continuation of the protectionist anti-dumping duties on shoe imports is a missed opportunity for the EU to take their concerns seriously, rather than continuing old-fashioned protectionist policies.''
In a sign of the internal political battle that may erupt again in Europe, 15 EU nations were opposed to opening an expiration review while 12 countries endorsed it when the commission consulted them in September.
The commission, which said the legal conditions are "clearly met'' for a review, pledged to try to complete it in less than 12 months to 15 months. The commission will have to make a recommendation to EU governments on whether to renew the trade protection.
Chinese exporters
Five months ago, the EU extended the 16.5% duty to Macau after concluding that Chinese exporters shipped leather footwear via the former Portuguese colony or assembled the shoes there to dodge the levy. Macau, a special administrative region of China, wasn't subject to the duty, which Chinese shoemakers including Aokang Group opposed.
The expiry review stems from a June 30 request by the European Confederation of the Footwear Industry, the Brussels-based lobby group that filed the original demand for trade protection against China and Vietnam.
The lobby group cited Chinese circumvention via Macau as a reason for re-imposing the measures, the commission said. The group also alleged continued dumping by Chinese and Vietnamese exporters and the risk of injury should the measures lapse, according to the commission.
The levies imposed two-years ago applied to 174 million pairs of shoes from China and 103 million pairs from Vietnam. In 2006, before the two-year duties were imposed, the EU said those shoes had an average retail price of 35 euros a pair.
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