China, EU square off over shoe charges

0 CommentsPrint E-mail Shanghai Daily, April 14, 2010
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China and the European Union will square off next week when China asks the World Trade Organization to launch a formal investigation of EU charges on Chinese shoes. [More trade disputes involving China]

A released WTO agenda also includes two unfair trade cases against the United States, with Vietnam alleging illegal US import barriers for shrimp and South Korea complaining about American charges on foreign steel products.

Separately, Indonesia has launched a new dispute over a US ban on clove-flavored tobacco products.

But the most sensitive topic at the WTO's meeting next Tuesday pits China and EU against each other over an EU decision in December to extend trade charges on Chinese and Vietnamese leather shoes by 15 months to protect European shoe makers.

China says the antidumping duties are protectionist and damaging to free trade, and has received backing from European importers and retailers.

Some shop owners and some shoe brands say they are the real victims of the EU's charges because they are forced to pay more for the vast number of shoes now made in China.

The European Footwear Alliance, which represents Timberland, Ecco, Hush Puppies and Adidas, estimates that EU consumers and businesses could lose hundreds of millions of euros through 2011.

The EU introduced the trade charges in October 2006, claiming European producers were being harmed because Chinese and Vietnamese rivals were illegally selling shoes below cost in Europe. It says the fees are still relevant because China is "dumping" shoes at artificially low prices and harming a European industry that employs 260,000 people.

Countries breaking international trade rules can face WTO-authorized sanctions, usually through higher tariffs on their exports. But trade cases generally take years to resolve and often avoid such retaliatory measures.

The EU can delay China's request for the establishment of a WTO investigative panel only once, meaning the investigation is likely to be established either next week or in May.

The charges add between 9.7 percent and 16.5 percent to the import price of Chinese shoes and 10 percent to Vietnamese shoes.

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