EUROPEAN COMMISSION ADOPTS ANTI-DUMPING DUTIES ON CHINESE, VIETNAMESE SHOES
The European Commission on 23 March decided to impose provisional anti-dumping duties on leather shoes imported from China and Vietnam. Starting on 7 April, duties of 4.8 percent will be imposed on Chinese shoes, rising to 19.4 percent by September. For Vietnamese shoes, the levies will rise from 4.2 percent to 16.8 percent.
The Commission suggested that its investigation into Chinese and Vietnamese enterprises revealed "clear evidence" of state intervention in both countries, including cheap financing, tax holidays, non-market rents, improper asset valuation and export incentives. "We do not target China and Vietnam’s natural competitive advantages," said EU Trade Commissioner Peter Mandelson, "only unfair distortions of trade".
Although shoe producers within the EU such as Italy supported the anti-dumping measures, even describing the duties as too low, other countries including Sweden criticized the move as "protectionist" (see BRIDGES Weekly, 22 February 2006). Agreement among EU member states will not be necessary for six months, when the Commission will try to finalise the provisional duties.
Responding to concerns that EU consumers would bear the burden of the new duties, the Commission suggested that retailers could swallow the additional costs, since the duties would only add about 1.5 euros to an import price of 8.5 euros for a product that retails for between 30 and 100 euros.
Chinese government officials, however, have called the Commission’s move groundless and discriminatory, insisting that Chinese companies were not exporting shoes below the cost of production. Meanwhile, Chinese shoe manufacturers are cooperating to try to appeal the decision next month at the EU.
Vietnamese Trade Minister Truong Dinh Tuyen vowed to go to Brussels to negotiate with Mandelson on the duties, which Vietnamese exporters argue have already affected the 500,000 jobs in the sector. Vietnam is not a member of the WTO.
"Trade Minister to negotiate for shoes in Belgium," VIETNAMNET, 28 March 2006; "EU adopts provisional anti-dumping duties on Chinese, Vietnamese shoes," XINHUA, 23 March 2006; "Commission adopts provisional anti-dumping measures on Chinese and Vietnamese leather shoes," EU PRESS RELEASE, 23 March 2006; "China, Vietnam angry over EU shoe tariffs - UPDATE," AFX NEWS, 24 March 2006; "China denounces EU shoe duties as unfair," REUTERS, 25 March 2006; "Vietnam footwear producers: No dumping in EU market," NHAN DHAN, 28 March 2006.
US-ECUADOR FTA TALKS CONTINUE IN FACE OF PROTESTS IN QUITO
Negotiations for a free trade agreement (FTA) between the US and Ecuador are continuing in the face of fierce protests by the indigenous population in the Latin American country. Following discussions on how to handle trade liberalization for sensitive farm commodities, including rice and corn for Ecuador and tuna and sugar for the US, Ecuadorean Trade Minister Jorge Illington and US Trade Representative Rob Portman emerged from their 27 March meeting confident that a deal would be concluded by the end of the month, if they can solve their remaining differences on such products.
An agreement would follow the US’ already-concluded FTA negotiations with Colombia and Peru. While the Ecuadorean government, led by President Alfredo Palacios, is determined to pursue the FTA, several domestic groups do not share his enthusiasm.
Protests in and around the capital, Quito, were initiated on 13 March by indigenous people’s groups including the Ecuadorean Confederation of Indigenous Nations (CONAIE). Protesters closed down highways with marches, demonstrations, and roadblocks, driving the Ecuadorean government to declare a state of emergency in some states on 21 March. Three days later, protests had been stopped, but are widely expected to resume.
The halting of FTA negotiations with the US is only one of the protesters’ demands. Indigenous groups fear that already impoverished Ecuadorean farmers will be displaced from markets by subsidized US imports, as was the case for many farmers in Mexico after the implementation of its FTA with the US and Canada.
Ecuadorean authorities had planned to conclude the FTA negotiations in December 2005, but were unable to do so due to disagreements on intellectual property issues (see BRIDGES Weekly, 25 January 2006). In February, negotiations were postponed once again due to a lack of agreement on agriculture.
"Indigenous-led uprising challenges FTA, US domination," WORKERS WORLD, 26 March 2006; "Ecuador: Protests Grow Stronger," GREEN LEFT WEEKLY, 29 March 2006; "Ecuador: Protests against free trade reach critical juncture," BILATERALS.ORG 23 March 2006; "Social agitation against FTA," GRANMA INTERNACIONAL, 15 March 2006; "Ecuadorean team eyes trade deal with US this week," BILATERALS.ORG; 27 March 2006.