EU shoe tariff extension predetermined, says footwear industry

BRUSSELS - The European Footwear Alliance said on Wednesday (14 October) that a European Commission move to extend import tariffs on Chinese and Vietnamese shoes was a predetermined decision and not based on evidence of dumping.

The commission is expected to come forward with proposals in the coming weeks to extend tariffs on shoe imports from the two countries – first imposed in 2006 – for a further 15 months.

A leaked draft of the proposal which circulated in Brussels earlier this week says the decision is based on the need to protect European shoe manufacturers from imports sold at below their real production cost.

But the alliance – made up of the European Branded Footwear Coalition, the European Outdoor Group and the Federation of the European Sporting Goods Industry – says the selection of Brazil as a comparison country when checking the Chinese and Vietnamese prices essentially predetermined the result.

"The commission's ability to choose an "analogous country" for the purpose of price comparison means that it ends up comparing apples and pears," said the alliance in a statement.

"Using Brazil, one of the world's most protected footwear markets, with its 35 percent import tariff of footwear ... and higher cost of labour ... exacerbates this effect," said the group.

Under current international trade rules, governments looking to start anti-dumping procedures against countries that do not have ‘market economy status' may look to a comparison country.

The EU's refusal to grant the status to China has long been a bone of contention between the two sides. Vietnam does not have the status either.

Commission defense

Commission sources familiar with the investigation defended the decision to use Brazil as the comparison country, saying it was based on objective criteria.

They also said that comparisons were made using Indonesia as the comparison country which again showed Chinese and Vietnamese shoe imports were priced unfairly.

But Iana Dreyer, a trade expert with the Brussels-based European Centre for International Political Economy, says the decision to extend tariffs is clearly a political one at a time when greater opening up of markets is unpopular.

"The case itself highlights the rather shaky legal and economic foundations of European anti-dumping measures," she told EUobserver.

"Brazil is not a low-cost economy like China or Vietnam. If you really wanted to carry out a good comparison it would be with India or Bangladesh," she said.

The tariff proposal is set to be adopted by the full commission in the coming weeks, and will then go to national governments for approval. If agreed it will be implemented on 3 January 2010.