EU agrees to impose duties on some shoes from China, Vietnam

March 22 | Updated: Mar 23 2006, 05:30am hrs
The European Union will start phasing in duties on some leather shoes from China and Vietnam next month in an attempt to stop cheaper imports from undercutting the 25-nation blocs producers.

The EU, which in the last year has imported 5 billion euros ($6 billion) worth of shoes from China and Vietnam, agreed today to impose tariffs starting at 4%, rising to a maximum 19.4% after five months, on some imports from the two nations on April 7. The duties will cover 9% of the shoes sold in the EU and exclude childrens shoes and some sports footwear.The European Commission, the EUs executive arm in Brussels, gave Trade Commissioner Peter Mandelson a mandate to adopt the measures on its behalf tomorrow.The decision to proceed with the tariffs proposed last month by Mandelson fuels tensions with China over textile and apparel imports and copyright piracy. The Asian nations trade surplus tripled to a record $102 billion last year, sparking increased calls in the U.S. and Europe for China to let its currency strengthen.

China, which joined the World Trade Organization in 2001, has hinted that it may file a complaint there against the EUs measures and has said that the claim of anti-dumping lacks proof and is obvious protectionism. A commerce ministry official on March 9 said the tariff violates the EUs own rules.

Chinas officials are probably well prepared to back up the statements theyve made, said Mei Xiayu, an economist at the Chinese Academy of International Trade and Economic Cooperation, which is affiliated with the commerce ministry. Any move from the Chinese side is possible.The EU rejected claims from Chinese and Vietnamese producers to calculate the dumping margins using their own data because the commission found the companies dont operate under market-economy conditions. Instead, the commission took data from Brazil for its calculations.

Thats not a fair comparison and leads to higher dumping margins, said Edwin Vermulst, senior partner at law firm Vermulst, Verhaeghe & Graafsma in Brussels who advises the Federation of the European Sporting Goods Industry, which opposes the measures, as well as Chinese and Vietnamese shoemakers.

China could take a complaint to the WTO, but that would be the first its ever taken on its own, Vermulst said. Vietnam doesnt have that option, and any challenge through the European courts would be difficult because they tend to be deferential to the commission.