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EC to propose extending anti-dumping duties on Chinese shoes

(Xinhua)
Updated: 2009-10-09 17:15

BRUSSELS: The European Commission is poised to propose an extension of anti-dumping duties on Chinese leather shoes, risking a renewed trade war with China, an industry source said on Thursday.

"I have no doubt that the commission will propose an extension, " the source, who has been deeply involved in the case, told Xinhua.

He said there are some big European Union (EU) member states, such as Italy and Spain, which would like to see the duties to stay, although most EU countries are opposed to the move.

Despite the opposition, the commission is still expected to propose an extension of the duties, which needs simple majority support from EU member states to take effect, the source said.

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But the commission is likely to propose an extension of 15 months to 2 years, instead of 5 years in usual cases, he said.

The EU decided three years ago to levy anti-dumping duties of up to 16.5 percent on imports of Chinese leather shoes as from October 7, 2006. The decision had split the EU and was criticized by EU retailers and consumers. As a compromise, the penalty measures were originally set for 2 years, instead of 5 years.

However, the commission launched a review to decide whether to continue the measures when they should had expired in October 2008. During the review period which usually lasts 12 to 15 months, the duties have remained in effect.

In a non-binding poll of 27 EU member states at that time, 15 voted to end the measures with 12 in favor of retaining them.

But the source warned there must be political horse-trading between EU governments when they are faced with the commission's proposal, so it is difficult to predict the result.

The possible move of the commission has already received strong criticism from EU industry associations and consumer groups.

The European Footwear Alliance (EFA), representing manufacturers such as Nike, Adidas and Timberland, said the duties added costs to European shoe makers themselves since many of them have transferred their production lines to China, where labor cost is much lower, and market prices were pushed up.

"Prices have increased by on average at least 10 percent since the imposition of the duties in 2006," it said in a press release.

"EFA members have paid around 800 million euros (US$1.18 billion) in anti-dumping duties in the last three and a half years and we fail to understand who has benefited," it said.

Brussels-based BEUC, the European consumers' organization, also opposed extending the duties, describing the commission's possible proposal as "farcical."

"No one will be happy with this farcical compromise and we trust member states will reject it," it said.

The move would reignite a years-old dispute between the EU and China, and it would be the latest anti-dumping action taken by the EU against Chinese products.

Faced with the worst economic crisis in decades, the EU has launched a series of anti-dumping actions against China this year, covering a wide range of Chinese products.

Earlier this week, the EU published its decision to impose anti-dumping duties of up to 39.2 percent on Chinese seamless steel pipes for the next five years.

The EU's unusual move has caused concern, especially when the world economy is in recession due to the financial crisis.

The Chinese Ministry of Commerce has warned the EU against its abuse of anti-dumping measures, calling on the 27-nation bloc to refrain from protectionism.