Thursday

22nd Oct 2020

EU on brink of shoe war

  • One euro extra per pair of Chinese or Vietnamese shoes (Photo: EUobserver)

The EU has triggered a trade dispute against cheap shoe imports from Asia, citing "compelling evidence" of China and Vietnam illegally subsidising footwear sold in Europe last year.

The move could lead to tariffs on imports from the two countries, starting on 7 April, in a bid to protect the European shoe industry.

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The European Commission argues that Beijing and Hanoi supported the shoe producers through various tax breaks, cheap loans and land rents and other trade-distorting measures.

"There is compelling evidence of serious state intervention in the leather footwear sector in both these countries," said the commission’s spokesman on trade issues Peter Power.

Partly as a result of their lower prices, Chinese leather shoe imports to the EU jumped by 320 percent over the last year, with a total of 95 million pairs sold up to last March.

Vietnamese imports amounted to 120 million pairs over the same period.

The protectionist move by the EU is expected to spark similar tensions as during last year’s trade battle over cheap Chinese textile imports, dubbed by media as the "bra war".

The dispute resulted in thousands of clothes and underwear items being blocked for weeks at European ports with retailers claiming huge losses due to the stand-off.

Under the commission’s current proposal, tariffs against Chinese and Vietnamese shoe imports could be triggered by 4 percent in early April.

These could be increased to 20 percent by October, unless the Asian governments prove that they are ready to give up the trade-distorting practices.

On the other hand, Brussels does not plan to introduce any quotas on shoe imports, in a bid to prevent a trade dispute and not hinder the retailers’ needs to provide goods on the shelves.

As in the past, EU member states are set to be divided between those supporting protectionist measures due to their strong textile and footwear industry, like France, Italy or Spain, and those advocating free trade and retailers’ interests, like the Scandinavian states and the UK.

The critics say the anti-dumping move will still end up in higher prices to be paid by European consumers, but EU officials promise the measures would only amount to an estimated €1 hike for every mid-prized pair of shoes made in China or Vietnam.

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