Bridges Weekly Trade News Digest • Volume 14 • Number 5 • 10th February 2010

China Brings Anti-Dumping Case against EU in Shoe Dispute

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China has requested consultations with the European Union over anti-dumping duties of as much as 16.5 percent that the 27-nation bloc has imposed on Chinese leather shoe exports since 2006.

“China believes that the anti-dumping investigations and the findings made by the EU violated various obligations under the WTO, and consequently caused damage to the legitimate rights and interests of Chinese exporters,” said China’s Ministry of Commerce in a statement.

In a case that will raise issues of China’s non-market economy (NME) status with respect to the EU, Beijing has challenged three European regulations as being inconsistent with the bloc’s obligations under WTO’s Anti-Dumping Agreement and China’s Accession Protocol.

First, China argues that due to China’s NME status, the EU specified dumping margins for China as a whole, instead of for individual exporters. It argues that such a calculation is unreasonable, not objective, and discriminatory.

Second, China is challenging a second EU regulation imposing and collecting the duties on the grounds that, among other things, various aspects of Brussels’ dumping calculations and process were wrong, unfair, or biased.

Third, China contends that the EU’s decision to extend duties after a 2008-2009 expiry review was inconsistent with the Anti-Dumping Agreement. Following that review, EU member states voted to extend anti-dumping duties through April 2011, despite the fact that the EU’s Anti-dumping Advisory Committee, which also has representatives from each member state, had voted to reject an extension.

The EU is standing by its duties.

“Anti-dumping measures are not about protectionism, they are about fighting unfair trade,” acting EU trade spokesman John Clancy said. “The decision to impose measures was taken on the basis of clear evidence that dumping of Chinese products has taken place and that this is harming the otherwise competitive EU industry.”

But some European footwear firms do not see eye-to-eye with the EU.

“Ironically, the measure hurts European business and consumers the most,” said the European Footwear Alliance, which represents Adidas, Rockport and Timberland, among others. “The extension of the footwear duties opens the door to retaliatory measures on EU exports to China and puts paid to European leaders’ repeated pledges to defend free trade.”

The countries have 60 days to reach an agreement; otherwise, China can request a WTO Panel to review the dispute.

Another Case for Vietnam?

Vietnam - which initiated its first WTO case last month and has faced EU leather shoe anti-dumping duties at 10 percent - may also join the consultations.

“Vietnam is closely watching China’s suit against the EU in the WTO for its anti-dumping duties on leather shoe exports and will take appropriate actions,” Nguyen Phuong Nga, Vietnam’s Foreign Affairs Spokesperson, told Reuters.

Shoes produced in China and Vietnam represent an estimated 30 percent of the EU market, while EU manufacturers employ 260,000 people in Europe, The New York Times reported.

ICTSD reporting; REUTERS, “UPDATE 3-China Launches Dispute at WTO over EU shoe duties”, 4 February 2010; NEW YORK TIMES, “China Lodges WTO Complaint Over E.U. Shoe Tariff”, 4 February 2010.