CHINA / Foreign Media on China

EU vote for shoe tariffs risks backlash
(International Herald Tribune)
Updated: 2006-03-24 10:24

http://www.iht.com/articles/2006/03/23/business/shoe.php

Bucking an outcry from retailers, the European Commission formally approved measures Thursday that make it more expensive for Europeans to import leather shoes made in China and Vietnam. The measures go into force on April 7.

The decision marks a victory for the EU trade commissioner, Peter Mandelson, who is seeking to satisfy demands by manufacturers in Italy to block unfairly subsidized imports while keeping cheap shoes available for retailers, and consumers, in Europe.

"It is important that we act against unfair trade while encouraging legitimate and competitive trade from emerging economies," Mandelson said, adding that China and Vietnam had used cheap financing, tax breaks and land-rent incentives to compete unfairly with European-made brands.

The EU will start by imposing duties of 4.8 percent on leather shoes from China and 4.2 percent on shoes Vietnam. The tariff is set to rise to 16.8 percent for shoes from Vietnam, and 19.4 percent for shoes from China, over the next five months.

European shoe importers vowed Thursday to keep up their campaign against the measures. They are seeking to weaken them further before the EU makes its final decision, expected in October, on whether to keep the measures in force for five years.

"We would like to avoid the measures entirely, as they are only damaging," said Paul Verrits, president of the Footwear Association of Importers and Retail Chains, which represents brands including Clarks in Britain and Columbia, which has a large presence in France.

Verrits said he would push Mandelson over the coming months to broaden the category of shoes that are exempted from the special tariffs to include, for example, work shoes with special, high- technology cushioning. So far, Mandelson has agreed only to exclude high- technology shoes used for sports - a move that was a significant victory for brands like Nike and Adidas.

Mandelson faces a complex diplomatic balancing act. Countries like Italy are pressuring him to impose stiffer duties. But countries that favor open markets, notably Denmark, are furious that the EU is erecting barriers.

At the same time, Mandelson must contend with retailers, who warn that tariffs could mean higher price for consumers.

For its part, China has said the allegations that it violates fair-trade rules are groundless.

On Thursday, EU officials said price increases should be unnecessary because only 9 percent of shoes bought by Europeans will be affected by the tariffs. According to EU officials, importers and retailers should be able to bear at least some of the added costs, because leather footwear import prices have fallen by about 20 percent in recent years while consumer prices have, in some cases, been increasing.