Chinese shoe manufacturers are preparing for a final battle
against the EU and its dumping charges before a primary ruling on
penalties is made, to fight for favorable tariff rates.
Wu Zhenchang, board chairman with Chuangxin Footwear in
Guangdong Province, said his firm was contacting other
enterprises and collecting information to try and prove that they
are not harming EU businesses.
The company, with seven other shoemakers, last month set up a
coalition to counteract charges of dumping made by the EU.
The coalition has the support of about 130 domestic
shoemakers.
Wu said the coalition would also urge the European Commission to
reconsider giving market economy treatment to Chinese
shoemakers.
An EU delegation will arrive on Friday to discuss issues
concerning dumping, according to a source.
The EU delegation is scheduled to meet Chinese enterprises in
Hangzhou in east China's
Zhejiang Province, and will come to Beijing for talks with the
Ministry of Commerce
and industrial associations on Sunday.
Meanwhile, enterprises are also being urged to argue the
substitute country issue. Since China is not recognized as a market
economy, the EU has chosen a third country with which to compare
Chinese companies' prices. In this shoemaking case, that third
country is Brazil.
"It is unreasonable to take Brazil as a substitute country
because its industrial structure is quite different and production
costs are much higher," according to Su Chaoying, deputy director
with China Leather Association. He added that he recommended using
Indonesia as the substitute country.
Wu expects that a unified stand by the shoemakers' coalition
could help to minimize the penalty duties to be imposed on some
Chinese firms.
Last month EU Trade Commissioner Peter Mandelson recommended
phasing in a 19.4 percent anti-dumping duty on Chinese shoes and
16.8 percent on Vietnamese footwear, over a six-month period.
"There is compelling evidence of serious state intervention on a
large and strategic industrial scale," Mandelson told European
media. "This state-supported dumping is causing serious injury to
European industry."
His proposal is scheduled to be discussed at the Anti-dumping
Committee meeting on Thursday.
If approved by a majority, the temporary tariffs will start at 4
percent in April and increase to the highest levels over six
months. Children's shoes and high-tech sports shoes will be
exempted.
Before coming up with the tariff proposal, the European
Commission declined to give market economy treatment to 13 Chinese
leather shoemakers that were investigated last autumn for
dumping.
Fu Donghui, a senior legal expert with Allbright Law Office in
Beijing, said the EU gave market economy treatment to several
Chinese firms (not in the shoe sector) involved in other cases of
dumping after 1997.
"We cannot believe that no company was given the treatment in
this shoemaking case, since the footwear industry is one of the
most market-oriented sectors in China," he said. "Moreover, we see
the EU going backward with these dumping charges," he added.
Possible duties on Chinese footwear would be a big blow for
Chinese players, as the EU is the second largest export market for
Chinese enterprises.
The dumping charge has also been condemned by some EU and US
footwear giants that operate plants in China, for they are likely
to shoulder higher costs.
It would also mean that European consumers would end up paying
more for their shoes. If shoe export prices increase by US$1 per
pair, EU consumers would pay around US$1 billion more for footwear
every year.
(China Daily March 7, 2006)