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EU Likely to Impose Tax on Imports of Chinese Shoes
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The European Commission is likely to impose a provisional tax on imports of Chinese leather shoes, despite disagreement about the move among member states.

The final decision, the result of allegations that Chinese firms "dumped" cheap shoes in the European Union (EU), is scheduled to be made next week.

The EU Trade Commissioner Peter Mandelson proposed late last month to levy an anti-dumping tariff on Chinese leather shoes beginning from April.

The tariff rate will start at about 4 percent and rise to around 20 percent by October.

EU member states were split in the latest vote on Mandelson's proposal on Thursday, but the coalition in favor of free trade was not strong enough to prevent the proposal from taking effect.

Among the EU member states, the Financial Times reported that three countries Belgium, Slovakia and Malta voted in favor of the duties. Nine or 10, including Sweden, Ireland and Slovenia, voted against and 11 abstained.

Abstentions are counted as votes in favor.

"Under the rules of the EU, a majority in a vote of member states is needed to overrule a proposal by the European Commission," explained Li Fayin, a legal expert with Beijing Allbright Law Offices. In this case, with abstentions counted, there were more votes in favor.

According to a statement published on the commission's website, EU member states expressed a wide range of views, both in favor of stronger provisional measures and in favor of more restricted action.

"The commissioner's proposals represented a middle ground," it said.

China's official response from the Ministry of Commerce was not available on Friday.

Although high-tech sports shoes and children's shoes are exempt from the tax, the tariffs are still expected to deal a heavy blow to China's shoe-making industry, said an unnamed insider close to the situation.

"China's own brand footwear makers mainly focus on the leather shoe sector. The proposal will hit such firms hard," the source said.

He explained that high-tech sports shoes and children's shoes produced in China were largely labeled with foreign brand names.

The European Commission said it would continue its investigation to "establish a consensus among member states on a definitive course of action when the investigation is concluded in the autumn."

The EU dumping claim against Chinese and Vietnamese leather shoes was initiated last July in parallel with a similar claim against work shoes.

The European Commission has for now decided not to adopt anti-dumping measures against work shoe imports from China because no evidence was found that such imports had hurt the European industry.
Mandelson's proposal has generated protests from China, Viet Nam and leading shoe producing companies in Asia.

'Measures are better than nothing'

Italy, which has a large shoe industry of its own, has also protested about the measures, saying they are not tough enough.

An EU diplomat said Italy was among the countries that abstained from Thursday's vote after the commission declined to make significant changes to the proposed duties.

"Italy thinks the measures are better than nothing but do not go far enough," the diplomat said.

The issue of competition from Asia has featured in campaigning for Italy's general election next month, with the government blaming the country's stagnant manufacturing sector and weak economic growth on what it says is unfair trade.

Scandinavian countries, traditionally the EU's biggest supporters of free trade, have rejected the need for anti-dumping duties at all.

Mandelson is due to recommend to a meeting of the full European Commission on March 22 the provisional duties be introduced.

Any definitive duties have to be applied from October.

Provisional duties do not require formal approval by EU member states but definitive ones do.

(China Daily March 18, 2006)


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