China And Vietnam Bitter Over EU Shoe Duties

by Mike Godfrey, Tax-News.com, Washington

09 October 2006

As expected, China and Vietnam complained about last week's imposition of 'anti-dumping' duties on shoe imports by the EU, and threatened to retaliate.

"The anti-dumping measures taken by the EU against Chinese leather shoes lack a legal basis and factual evidence and harm the rights of Chinese leather shoe manufacturers," said a Chinese commerce ministry spokesman. "The Chinese side will closely watch this issue and see how it develops and will maintain the right to take corresponding measures."

Nguyen Gia Thao, president of Vietnam's Leather and Footwear Association (LEFASO), said: "it is certain that it will affect the jobs of between 60,000 and 70,000 workers in the industry and some small-scale enterprises will face bankruptcy."

Provisional duties had been imposed last March, but are due to expire this week. The new tariffs (lower than the provisional ones, in fact) will be 16.5% on Chinese shoes and 10% on Vietnamese shoes.

Reportedly, Peter Mandelson, EU trade commissioner, had pushed for a 5-year tariff as requested by Italy, the country most at risk from cheap imports, but finally accepted a 2-year period as proposed by France.

The UK voted against the measure; but abstentions from Malta, Cyprus, Austria and Slovenia (which count as votes in favour) were enough to swing the result in favour of the duties.

China threatened last March to take the EU to the World Trade Organisation over the issue, but held back pending the outome of the October EU talks.

EU shoe importers said that the tariffs helped no-one, and will simply 'shield inefficient manufacturers from global competition' to the detriment of consumers.

According to the Chinese, 98% of enterprises in China's shoe making sector are privately run firms or joint ventures, and the State intervention claimed by the EU as a justification for its duties simply does not exist.

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