EU on brink of shoe war with China,
Vietnam By Stefania Bianchi
BRUSSELS - The European Union is on the
brink of a shoe war with Asia as it considers
imposing restrictions on imports of shoes from
China and Vietnam.
The European
Commission, the EU's executive body, says the bloc
has evidence that Chinese and Vietnamese firms
were illegally subsidizing - or "dumping" -
footwear sold in Europe last
year. Dumping is the sale of
a product for export at less than its normal value
in the market where it is produced.
The EC
argues that the Chinese and Vietnamese governments
supported their shoe producers through tax breaks,
cheap loans and other trade-distorting measures.
"There is compelling evidence of serious
state intervention in the leather-footwear sector
in both these countries," EC trade spokesman Peter
Power said on Monday. "This involvement takes the
form of cheap finance, non-market land rent, tax
breaks and improper asset evaluation. There is
evidence of dumping and injury."
Brussels
opened the probe into shoes with leather uppers
last July under pressure from European
manufacturers worried about a huge jump in Chinese
and Vietnamese imports into the bloc. Imports of
Chinese leather shoes into Europe rose by 320%
between April 2004 and March 2005, with a total of
95 million pairs sold in the bloc. Over the same
period, imports from Vietnam increased by 700% to
120 million pairs.
If the EU decides to go
ahead with anti-dumping measures, they could be
applied as soon as April 7 for six months, and
could then become definitive for the next five
years. The move could lead to tariffs on imports
from the two countries in a bid to protect the
European shoe industry, but the EC says it is too
early to say what EU Trade Commissioner Peter
Mandelson could propose.
Southern and
central-eastern European countries with
significant domestic shoe production, such as
Spain, Italy and Hungary, are pressing for the
duties to be imposed. But the industry is split
between organizations representing local
shoemakers who talk about the threat to European
industry and other groups warning that tariffs
would threaten Europe's consumers and retailers,
and its competitiveness. Some shoe retailers are
warning that anti-dumping duties would
dramatically increase the price of shoes within
the bloc.
The Federation of the European
Sporting Goods Industry (FESI) says it is
"seriously concerned" about the impact such
measures would have on Europe's consumers. It says
consumers would end up paying the anti-dumping
duty, as shoe prices would increase by 25%, with a
"negative impact" on buying behavior. The
organization said it is pleased that the EC's
proposals are currently limited to shoes with
leather uppers, but it is warning that the
measures could impact on the industry and
consumers.
The European Confederation of
the Footwear Industry, known as the CEC
(Confederation Europeenne de l'Industrie de la
Chaussure), which represents all major national
footwear federations of the EU and also observing
countries of Central and Eastern Europe, says it
is important to stress "the overall Community
interest for the adoption of appropriate
anti-dumping measures". It says anti-dumping
measures are in the interest of the EU and "will
not create negative effects" such as increased
prices, reduced employment or reduced choice for
the consumer.
"From the arguments of the
opponents to anti-dumping measures, it is clear
that their aim is to create a doom scenario of
negative effects for consumers, employment and the
Community as a whole, which would be caused by
measures favoring only a dead industry which has
not been able to anticipate the challenges of a
global economy," CEC managing director Roeland
Smets said on Tuesday. "CEC renounces this false
picture as well as the negative impacts and
stresses the need to place facts into their real
context and perspective."
The CEC is
urging the EU to impose high tariffs on China and
Vietnam to curb the influx of shoes from the
region. "At the moment the European Commission is
trying to please all sides involved in the
discussion, but it needs to get its priorities
right to support the European industry," he said.
Such action by the EU would be expected to
spark tensions similar to the trade battle last
year over cheap Chinese textile imports, or the
"bra wars" as that dispute came to be called. Huge
quantities of clothes and underwear items were
blocked for weeks at European ports, with
retailers claiming huge losses due to the
standoff.
Any tariffs on shoes would have
to be agreed by member states, which could happen
as early as at the General Affairs Council meeting
in Brussels next Monday.
