China denounces EU shoe duties as unfair

Beijing, March 24 | Updated: Mar 25 2006, 05:30am hrs
China on Friday harshly criticised an EU decision to place anti-dumping duties on some Chinese-made shoes, calling the action groundless and discriminatory as manufacturers also prepared to fight.

Chinas Ministry of Commerce, which handles international trade, said China was unhappy about the EU decision to impose duties of up to 19.4 percent on leather shoes.

Spokesman Chong Quan said Chinese shoemakers were not dumping and have not caused substantial damage to European shoemakers, according to a statement issued on the ministry Web site.

This approach lacks any basis in fact and law, and violates the principles of fair trade, said Chong.

The European Commission on Thursday formally approved the anti-dumping duties, which include duties of 16.8 percent on leather shoes from Vietnam. It said the decision affected about nine of every 100 pairs of shoes bought in the EU.

Brussels says it has evidence of serious state intervention for Chinese and Vietnamese shoe exporters, including non-commercial government loans and bargain deals on land.

It will phase in the duties over six months from April 7, starting at about 4 percent.

Chong said Brussels was clearly discriminatory in refusing to accept that Chinese shoemakers operated in a market setting.

China has said it may take the dispute to the World Trade Organisation and Chong said the European Union should reconsider its decision and make a determination in conformity with WTO rules.

Some China-based footwear manufacturers said the European Unions long-threatened decision had already hurt orders, with European buyers wary of price uncertainties. Others said they had yet to feel any effect.Michael Wu, who leads a coalition of over 100 China-based shoemakers fighting the anti-dumping duties, told Reuters the ultimate effect of the EU measure could be very large.

In the short term it will be moderate, but it will definitely affect lots of companies if the level rises past 19 percent, said Wu, who is deputy chairman of Hong Kong-listed shoemaker Pegasus International Holdings Ltd., which runs a shoemaking complex in far southern China.

An editorial in the English-language China Daily said the EU decision would not save shoemakers in Europe.

The curb on China shoe imports will not sharpen EU shoemakers competitive edge, it said. Painful but inevitable industrial restructuring would be the better option.

Chinese footwear manufacturers were planning a legal fund to contest the EU decision, the official Xinhua news agency said.

The China Leather Industry Association reported on its Web site that targeted manufacturers were shifting to other materials and striking deals with other, unaffected firms to reduce losses from the threatened duties.

In 2005, China shipped 1.25 billion pairs of shoes to the European Union a rise of over 450 percent on 2004 and about 16 percent of that number would be covered by the new duties, according to EU statistics.

EU Trade Commissioner Peter Mandelson said on Thursday he wanted to work with China and Vietnam to address the questions of competitive distortions.

Last year, Mandelson was at the centre of tortuous negotiations with China over EU limits on garment exports.