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Gov't to Support Shoe Firms in Court
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The Chinese Government will support domestic footwear companies if they take the European Commission to court for its ruling on imports of Chinese leather shoes, said a senior trade official.

The European Union (EU) imposed provisional tariffs on imports of Chinese leather shoes from April 7, ignoring applications from Chinese firms for market economy treatment and individual treatment.

But there is still the possibility of overthrowing the European Commission's decision through the courts, Gao Hucheng, China's deputy commerce minister, told China Daily.

"If Chinese companies take the EU to court for anti-dumping duties, the Chinese Government will support them," he said. "But it will only be a move by enterprises, not a lawsuit initiated by the government."

The EU provisional tariff rate imposed on Chinese shoes will increase from the current 4.8 percent to nearly 20 percent in six months.

According to anti-dumping regulations, companies involved may appeal to the European court if they are not satisfied with rulings made by trade departments.

Previously, some Chinese shrimp enterprises have managed to overthrow anti-dumping cases via the courts.

After the US Department of Commerce declared it would levy punitive duties ranging from 27.89 percent to 82.27 percent on Chinese shrimp exported to the US, 32 Chinese firms appealed to the US Court of International Trade in March last year.

The group was the largest so far to appeal against an anti-dumping ruling. The lawsuit has not yet been settled.

In the shoemaking industry, more than150 companies in China formed an alliance earlier this month, jointly raising 3 million yuan (US$375,000) to contest the EU's decision.

China has been keeping in touch with the EU through various means such as informal talks, consultations and negotiations, expecting to solve the issue with dialogue for the interests of both sides, Gao said.

"But we do not rule out any another alternatives to work it all out," he added.

The vice-minister said in an earlier interview that China reserved the right to file a complaint about the EU to the World Trade Organization (WTO).

The Chinese Government argued that the European Commission lacked reliable evidence about the alleged dumping.

It required the EU to fairly treat Chinese companies involved in the case and make a final decision in accordance with WTO rules in order to ensure the normal development of the footwear trade between China and the EU.

The provisional penalty measures have already hit some Chinese shoe exporters.

Some exhibitors at this year's Chinese Export Commodities Fair in Guangzhou said they have witnessed a sharp decline in orders for leather shoes in recent months.

Some firms said they would have to fulfill most of the in-hand orders before the tariff rate is increased to 20 percent.

Some EU buyers have admitted they will have to transfer some of their orders of leather shoes to other countries such as India and Indonesia, because they "do not know what will happen in six months."

In recent years, China has witnessed an increasing number of trade conflicts.

However, Gao said it was normal for China's growing foreign trade sector to see trade disputes.

He said Chinese companies had to find other ways to improve foreign trade growth, such as boosting the research and development sector and protecting domestic intellectual property rights.

"This task is an urgent one but is also a medium- or long-term one," he said.

(China Daily April 19, 2006)

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