Sun, Apr 09, 2006 - Page 11 News List

Chinese shoemakers ally against EU tariff increase

COMPETITION The EU on Friday hiked its import duties, saying that while the prices of Chinese and Vietnamese shoes have dropped, consumers are still paying the same

AFP , BEIJING

Chinese shoemakers made a last-gasp effort to derail a 19.4 percent tariff increase on leather shoe exports to the EU as the rate rise was implemented on Friday, Xinhua news agency said.

A group of 14 shoe companies in Wenzhou City in east China's Zhejiang Province, issued a joint declaration to oppose the EU sanctions, Xinhua said.

In the declaration, the enterprises proposed that all Chinese shoemakers concerned should further enhance cooperation with their EU trading partners in filing objections.

About 20,000 Chinese shoemakers are at the center of EU accusations that they are selling their leather products for export at less than normal value due to unfair government and industry practices.

Such practices are known as "dumping" and the tariffs are "anti-dumping measures" in WTO terminology.

The EU began imposing antidumping duties on leather shoe imports from China and Vietnam on Friday.

The tariffs start at 4.8 percent for China and 4.2 percent for Vietnam, but are due to rise progressively up to September, when they will hit a maximum of 19.4 percent for China and 16.8 percent for Vietnam.

EU nations authorized the European Commission to impose the duties on leather shoes last month after the EU's executive body identified "clear evidence of disguised subsidies and unfair state intervention to the leather footwear sector in China and Vietnam."

The 14 shoe companies said the tariff hike went against WTO rules as the EU did not obtain enough evidence to warrant it, the report said.

Besides hurting the business of the 14 companies, the new tariff will also harm European shoe importers and European consumers, it said.

China's shoe industry -- much of which is based in Wenzhou where 4,000 footwear manufacturers are headquartered -- have flatly rejected the EU's claims of unfair trade practices.

They argue they are simply relying on China's surplus of cheap labor for their inexpensive products, as well as rapidly modernizing industry techniques, and have vowed to appeal to the EU.

Half of the 2.5 billion pairs of shoes sold in the EU last year came from China. However the new duties only apply to about 9 percent of the EU market, covering leather shoes from the two countries. Children's footwear and some high-tech sports shoes are excluded from the duties.

The EU will continue its investigation until later this year, then decide whether to extend the duties for up to five years.

According to EU figures, imports of leather shoes from China soared 450 percent from 2004 to last year and by 1,000 percent from 2001 to last year.

Vietnamese imports fell by 1 percent from 2004 to last year, mainly due to sharper competition with China, but grew 95 percent from 2001 to last year, the EU said.

It said the average unit price for both Chinese and Vietnamese leather shoes fell by an average of 28 percent over the last four years, while prices for consumers have remained steady.

The latest EU-China trade dispute has also divided European industry. Italy's footwear association complains the tariffs are too low to protect 850,000 shoemakers, but retailers and importers have warned they will jeopardize jobs and push up consumer prices.

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