By Daisy Ayliffe - 23rd February 2006
The EU has proposed an import duty on shoes from China and Vietnam to counteract dumping.
EU trade commissioner Peter Mandelson proposed duties on Thursday after finding "compelling" evidence that the Asian countries are unfairly dumping goods on European markets.
The European commission proposes tariffs that rise progressively over five months.
If approved by EU governments, they are expected to start in April and rise to up to 20 per cent.
“There is evidence of injury to EU producers,” Mandelson told reporters on Thursday.
“Since 2001, European footwear production has contracted by about 30 per cent, domestic prices have fallen by about 30 per cent. This is not solely related to dumped goods. But state intervention and dumping in China and Vietnam have exacerbated intense competition.”
Between April 2004 and March 2005, EU imports of shoes from Vietnam increased by 700 per cent, while imports from China increased by 320 per cent.
The volume of shoes coming into the EU from Vietnam is 120 million pairs a year, while around 95 million pairs come from China.
‘Bra wars’ take II?
China refutes the allegations of dumping and argues that duties would work against the EU and trigger a rerun of last year’s ‘bra wars.’
Gao Hucheng, China’s vice-minister of commerce, last month warned that Beijing could seek WTO arbitration if the EU employed sanctions based on “severely flawed” legal arguments.
But speaking on Thursday, the British trade commissioner played down the idea that China would take the issue to the Geneva based arbitrator.
“When I spoke to ministers today, China did not refer to the possibility of going to the WTO. But it is their right to do so if they want to test this in the WTO machinery.”
“The commission will seek to work with the Chinese and Vietnamese to address the concerns raised. The commission welcomes signals that they are ready to engage and address the problem,” he added.
Vietnam have also strongly denied the charges and called for a "fair decision" on tariffs.
Internal disputes
As with the ‘bra wars’ scenario, the latest trade row has threatened to split the EU internally.
More liberal northern states that have long outsourced shoe production to Asia are pitted against southern European countries that produce their own shoes.
The introduction of tariffs has caused concern in Sweden where the government has attacked Brussels protectionist policy.
“I don’t accept that action to beat unfair trade is protectionism,” Mandelson hit back. “We are targeting anti-competitive behaviour and not Asia’s natural advantage.”
Children’s shoes and high-tech ports shoes will be excluded from the provisional measures because the commission did not find suifficient evidence of injury in this area.
“If there is not sufficient EU industry involved to incur injury, I cannot propose measures to correct injury,” the trade commissioner explained.
But the EU executive proposals received a cool reception amongst branded footwear makers. They fear a repeat of the bra-wars crisis.
“Today’s decision by the European commission has confirmed branded footwear manufacturers’ worst fears, and in the process looks set to recreate many of the mistakes of last summer’s textile dispute,” the European Branded Footwear Coalition said in a statement.
"The commission seems determined to give its citizens high-priced shoes," the group added.
Consumer fears
“The duty will be just over €1.5 so the idea that this will lead to a price rise of 20 per cent is fanciful,” the trade commissioner snapped back.
“I would suggest to retailers that there is plenty of margin for them to afford this anti-dumping duty without detriment to consumers.”
“I am not here to equip EU industries so that can survive when they are uncompetitive. My job is to uphold standards of fair trade – so that competitive EU industries have the facility to trade in international markets along with the best,“ Mandelson insisted.
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