Cotance denounce Brazilian raw material tax

Published: 02 March, 2007

The COTANCE council welcomed a small delegation of the European Commission for reviewing progress on international trade issues relevant to the leather industry. Mrs Madeleine Tuininga in charge of Market Access and Industry in DG Trade, assisted by Mrs Regina Piovesana and Mrs Friederike Afokpa, reported on the adjustments of the EU's external trade policy and on how the interests of Europe's leather industry are going to be addressed in multilateral and bilateral trade negotiations. Mrs Tuininga commented that the fight against export taxes/restrictions on raw materials has reached in the EU the highest level of priority and that a policy change in that respect is out of question.

COTANCE members drew the European Commission's attention on the recent Brazilian impertinent move to consolidate the export tax on raw materials for the leather industry disregarding for the second consecutive time the self-imposed schedule for the dismantling of the trade barrier. European tanners denounce the move saying that export taxes on raw materials provide a subsidy to the protected leather industry that can reach up to 20% of production costs and that there are few operators on the open market capable of withstanding such unfair competition over time.

COTANCE calls on the European Commission to respond with the adequate severity that the case merits for not only European tanners will watch the reaction of the EU but also less fortunate developing countries counting on the EU to bring about rules that would confine the use of export taxes/restrictions to those industries and countries that really need them, notably in Africa.

The meeting took place in mid February when representatives of the leather industry from Hungary (BCE), Spain (CEC-FECUR), France (FFTM), Finland (FLIA), the Netherlands (FNL), Sweden (SG), United Kingdom (UKLF), Italy (UNIC), Belgium (UNITAN), Germany (VDL) and Switzerland (VSG) met in Brussels under the chairmanship of Jean-Claude Ricomard (Tanneries Roux, France) for their early year COTANCE Council Session.

They reviewed the state of the leather trade concluding that 2006 has resulted for European tanners much better than 2005. The recession that has adversely affected leather markets in the recent past seems definitively gone and economic indicators are consistently showing an improvement of the leather trade. Business for European tanners has seen a 5% increase in 2006 and the outlook for 2007 is sensibly better. Bovine leather seems taking the lead followed by the sheep and goat leather sector.

COTANCE members also reviewed hides and skins availability in Europe. Slaughter figures for 2006 do not give any ground for a rise in domestic prices. As they did in the COTANCE Lausanne Council (2006), European tanners expressed their perplexity in front of domestic raw material price increases that seem unjustified, notably in the calfskin sector.

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