EU may keep footwear duties to China and Vietnam

9 October 2009

The European Commission is likely to propose a 15-month extension of duties on footwear made in China and Vietnam, European Union diplomats have said, despite broad opposition from major shoe corporations and many European governments.

The commission, the EU's executive arm, is expected to argue that Chinese and Vietnamese shoe companies are shipping their products to the EU at artificially low prices - especially compared with the price of shoes made in other developing countries such as India, Brazil and Indonesia.
The commission is also expected to argue that the duties, which are 16.5% on Chinese shoes and 10% on Vietnamese shoes, have cost European consumers only 1.50 euro per pair.
Global corporations, such as Adidas and one of Adidas' main suppliers, the Hong Kong-based shoe manufacturer Yue Yuen Industrial Holdings, have fought to end the duties, which were put in place in October 2006 and were set to expire last year. But European shoemakers in June 2008 asked the commission to extend the duties, and the commission agreed to examine the issue.
The commission's proposal will be distributed to the shoemakers and the large shoe importers on October 9, EU officials said.
It will be discussed at a meeting of EU trade experts in November and must be approved by the European Council. If the duties are cleared, they will come into force at the beginning of January 2010.
It is unclear whether the council will approve an extension of the duties. European shoemakers tend to be small and medium sized businesses, concentrated in Italy, Portugal, Romania, Spain and Poland. The governments of those countries, and a few others, will support extending the duties, but many other EU countries oppose them.
The duties apply to leather footwear, which excludes most sneakers.
Over the last decade, Chinese and Vietnamese exporters have chipped away at the EU market share of European shoemakers, which has decreased to 40-45% from around 60% in 2001. Supporters of the duties say they have prevented even more market share losses by European shoemakers.
The case has been a top priority for the Chinese government, as millions of people in China are employed in the footwear industry. About 250,000 Europeans work in the European leather goods industry, most of which are employed making shoes.
Source: Dow Jones Newswires

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