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China Shoe Makers Face Hefty EU Duty
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Chinese leather shoe manufacturers are likely to face anti-dumping duties of nearly 20 percent for export into the EU market during the year.


An unnamed source close to the situation told China Daily yesterday that the European Commission is likely to impose a 4.8 percent penalty duty on made-in-China leather shoes beginning this April.


The figure will be phased up to 19.4 percent by October, the source said.


Sports shoes and children's shoes are exempted.


The European Commission is scheduled to submit the draft tariffs to the EU tomorrow, and it will then be discussed at the March 9 meeting of the Anti-dumping Committee.


If the planned provisional duties are approved, they will be imposed in early April.


Su Chaoying, vice director of the China Leather Association, said the anti-dumping measure is not justified.


Su also referred to 13 Chinese leather shoemakers who were denied market economy treatment following an investigation by the European Commission last September.


The commission compares export prices and production costs to determine if a Chinese exporter is guilty of dumping. 


Because China has not been granted market economy status by the EU, enterprises involved in anti-dumping investigations have to win a market economy treatment separately and submit themselves to investigations. If not, the EU uses the costs as prevailing in a third country to do their calculations. 


If costs in a country like Brazil were used, it would be disastrous for China because China has cheaper labor, materials resources and more mature industrial chain.


"The European conclusion on the market economy treatment issue is groundless," Su said.


The EU said they declined to grant the market economy treatment to Chinese shoe makers because they had received government allowances.


"The tax rebates and other forms of allowance they have is also enjoyed by European companies," Su said.


Official comments from China's Ministry of Commerce, the country's trade watchdog, are not yet available.


Some trade experts in Beijing predict that the Chinese government, in an effort to reduce the dumping charge by the EU, might offer to impose an export tariff on or cap the export volume of footwear.


Although initiated by some European footwear enterprises, the dumping charge also aroused heated debate among European manufacturers.


Some well-known European shoe companies recently condemned Brussels' plan.


The European Branded Footwear Coalition (EBFC) said the European Commission risked repeating the mistake of last summer's "bra wars" over textile imports.


After quotas on textiles were removed last year, European textile makers called for government action against textile and garments imported from China, fearing Chinese exports would flood their market and hurt local industry.


The conflict was concluded with a bilateral agreement that capped the annual growth rate of China's textile export to the European market.


The coalition said the proposed duties would put force shoe prices up in Europe where most of the value is generated.


"We are concerned that setting the duty at a rate that cannot be absorbed by manufacturers and retailers will ultimately be borne by European consumers," it said.


EBFC is an industrial group that consists of a number of famous European shoe brands, such as Clarks and Timberland.


China produces about eight billion pairs of shoes a year, according to the commerce ministry. Guangdong Province, the center of China's shoe manufacturing, accounted for about half of that production in 2004 and exported 2.5 billion pairs.


 (China Daily February 23, 2006)

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