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8 October 2009

EU may slap anti-dumping tax on shoes imports

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The European Commission has proposed extending anti-dumping duties on EU imports of Chinese and Vietnamese shoes for 15 months, despite huge opposition from member states, global brands and consumers, Reuters reported, quoting EU sources said.

If approved, the new duties would take effect from January 3, 2010, much to the annoyance of large global footwear producers, major European retailers and consumers across the 27-nation bloc struggling to deal with the worst economic downturn in decades.

"The proposal put forward by the Commission, which will be now sent to the interested parties by the end of the week, is to extend the current duties by at least 15 months," one source citing from the proposal told Reuters on Wednesday.

"Most (European Union) countries still oppose the plan and the issue should be voted on by member states on November 12. A decision must be made by November 20 at the latest for it to come into force."

The EU regularly splits over dumping cases between members supporting freer trade and those worried about cheap competition undermining their own manufacturers.

The EU first imposed duties of up to 16.5 percent on Chinese shoes and 10 percent on those made in Vietnam for two years in 2006 after EU manufacturers accused the two governments of unfairly subsidising their low-cost shoe makers so that EU producers could not compete.

Brussels temporarily reimposed the tariffs last October pending a review, despite opposition from the majority of member states and the threat of legal action by Beijing at the World Trade Organisation.

In a bid to avert another so-called "shoe war" with member states and further damaging already tense economic relations with China, the Commission -- which oversees EU trade policy -- has proposed a 15-month extension instead of the normal five-year term for what are known as "definitive duties".

"Prices have increased by on average at least 10 percent since the imposition of the duties in 2006," the European Footwear Alliance, representing manufacturers such as Nike, Adidas and Timberland, said in a statement.

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

Major retailers such as Metro and Marks & Spencer, hit by dwindling consumer spending in Europe, described the decision as "farcical".

"Time and again the Commission talks a good game on free trade but caves in to the usual vested interests at the last minute," said Alisdair Gray of the British Retail Consortium.

"No one will be happy with this farcical compromise and we trust Member States will reject it." European consumer lobby BEUC also opposes extending the duties.

Austria, Belgium, Britain, the Czech Republic, Cyprus, Denmark, Estonia, Finland, Germany, Ireland, Latvia, Luxembourg, Malta, the Netherlands and Sweden still want the duties scrapped immediately, sending a positive message before the lucrative Christmas retail period, an EU diplomat said.

But major shoe-producing members Italy, Spain, France and Poland want to keep the duties.


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