It's official: EU shoe wars

Just over a month ago I asked: EU to start a shoe war with China and Vietnam? The answer came today, and was in the affirmative. A two year tariff will commence this Saturday, replacing temporary duties already imposed. Lucia Kubosova at the EU Observer has the story: EU imposes tariffs on Chinese shoes after bitter debate

BRUSSELS - The EU's shoe-producing countries have won a battle for a two-year anti-dumping regime against imports of Asian footwear starting from Saturday (7 October), with European retailers and consumer groups strongly criticising the move.

After weeks of debate on the controversial issue, the European Commission got the go-ahead from member states on Wednesday to impose tariffs of 16.5 percent on leather-shoe imports from China and 10 percent on Vietnamese imports.

Under EU rules, the commission's plan could not go ahead if it was opposed by a majority of the 25 member states. But while this was the case during previous rounds of trade talks, Wednesday's vote saw 12 countries rejecting the protectionist move with nine voting in favour and four abstentions -which count as approvals in this case.

Sweden and the UK featured among the strongest advocates of the free trade approach, while countries with a strong shoemaking sector like Italy, Spain and France favoured safeguard measures.

The final compromise is based on a proposal tabled by Paris to reduce the period during which the tariffs should be applied from the usual five years to just two years. "In the final stages of the negotiations, the length of this period was the main and only issue we debated as a possible compromise element," said one diplomat.

A Finnish EU presidency official told EUobserver that the agreed deal - to be formally rubber stamped by ministers tomorrow, just one day before the deadline of 6 October for the EU to adopt the anti-dumping scheme - is viewed as the right "balance between the interests of EU producers and consumers."

EU trade commissioner Peter Mandelson also defended the move, insisting that it was in line with the member states' prevailing views on the issue which is "certainly not a protectionist line of thinking."

"If we're going to stand up for global free trade we must also keep in place some safeguards against unfair trade" as practised by some trade players outside the EU, suggested the commissioner.

Hmmm. 'Unfair trade' like, say, agricultural subsidies Peter? The piece continues:

Asians deny 'dumping'
EU officials accuse China and Vietnam of selling shoes in Europe at unfair low prices, while both Asian countries deny the allegation, with Vietnamese officials telling Bloomberg news agency they would not "accept the decision" adopted on Wednesday.

Consumer groups and retailers have also protested against the step, as it will lead to increases in Asian shoe import wholesale costs and consumer prices - with a current average import cost at €8 per pair.

...Blow to free trade
"It's a huge disappointment for all proponents of free trade," said Alisdair Gray, director of the British Retail Consortium in Brussels, adding "This won't save a single job in Europe, nor will it stop manufacturing jobs shifting to China."

China supplied around half of the 2.5 billion pairs of shoes sold in Europe in 2005, while four-fifths of the bloc's leather shoes come from Italy, Portugal and Spain.

According to the European Commission, EU shoe imports from China jumped more than fourfold between 2001 and early 2005, while Vietnam's shipments almost doubled over the same period.

Comments

[Will Johnson]

I can not believe that the EU is taking such a protectionist stance with imported shoes. Are we talking about fine leather shoes. It seems that putting a tarriff on the Asian shoes as they enter will have a similar effect as the US steel tarriff from a few years back. It will create some sort of retaliation from the Asians and affect some other industry. The economic effect will raise revenue in the shoe industry by making the shoe prices more equal. But sooner or later the Asian market will have another cheap product and flood the EU market with that. It seems to me that it is impossible to stop all the products without rising the prices of product in the EU to an unaccustomed high causing consumers to avoid purchases.