The exporters lose out and European manufacturers in China also suffer. And at the end of the day the consumers themselves find they are unable to get access to the product.

 

The provisional tariffs imposed on Chinese leather shoes by the EU are a "no win" situation for all concerned and must be turned around, a Ministry of Commerce official said yesterday.

 

The EU was not justified in imposing the anti-dumping penalties as there was no credible evidence for denying market economy status to Chinese shoemakers, Vice Minister of Commerce Gao Hucheng told China Daily.

 

He was referring to the EU decision to levy provisional tariffs on imports of Chinese leather shoes. The measures come into force today with tariffs gradually rising from 4.8 percent to 19.4 percent by October when a final decision on the issue is expected.

 

"The EU declined to grant market economy status to 13 firms it investigated," said Gao. "But all of them are privately-owned or foreign-funded and comply with the criteria for market economy treatment," he added. Gao is also the ministry's international trade negotiation representative.

 

"It also denied market economy treatment to some 150 non-sampled companies, about 90 percent of the total respondents, and no explanation has been given for that," he said.

 

The EU began to give market economy status to some Chinese firms in anti-dumping cases in 1998. As China was not recognized as a full market economy by the EU, the status helped individual companies gain access to the European market.

 

The EU violated World Trade Organization (WTO) anti-dumping rules and also its own laws and procedures on the issue as none of the 160 respondents had received disclosure from the EU on their claim for individual treatment, said Gao.

 

The EU's determination on dumping and injury in the case lacks enough evidence, he said.

 

Shoemaking is a labor-intensive industry in which China enjoys comparative advantages in terms of labor and resources, he said. The EU should not arbitrarily regard the price of Chinese leather shoes as being dumping, he said.

 

"Most Chinese shoemakers are small to medium-sized businesses and not in a position to dump goods in the EU marketplace," he added.

 

He noted that the European petitioner listed only six of the 15 injury evaluation indicators required by the WTO Anti-dumping Agreement.

 

"So the EU lacks adequate evidence to file the case," Gao said. Since no harm was being done to the EU industry there was no reason for the case, he said.

 

The penalties were also against EU companies' interests, Gao pointed out.

 

According to Chinese statistics, footwear producers from the original 15 EU member states have set up 478 plants in China with an actual direct investment of US$737 million and they also export to the European market.

 

"Anti-dumping measures against Chinese footwear exporters will surely also impair the profits of EU footwear producers and investors in China," Gao said.

 

Chinese footwear exports are in essence low- and middle-end products while the EU produced mostly high-end goods, he said.

 

"Meeting the different needs of consumers means the two products are not in direct competition and have obvious differences in sales channels and their respective markets," said Gao. "The anti-dumping measures are not only unnecessary but also harmful to the interests of EU middle- and low-end consumers," he explained.

 

Gao said footwear exports from China generated lucrative returns for EU importers and retailers and provided a large number of jobs.  

 

The development of the Chinese footwear industry also ensures EU exports of shoemaking machinery, leather and other raw materials every year.

 

According to Chinese customs statistics, in the first 11 months of 2005, leather imports from the EU reached US$570 million, a year-on-year increase of 27 percent. China imported US$54.04 million worth of shoemaking machinery from the EU in 2004, up 26 percent year-on-year.

 

Gao urged the EU to treat Chinese firms fairly and reevaluate the whole case to ensure the development of the trade.

 

Last July the EU initiated anti-dumping investigations into leather shoes worth US$730 million from China, the largest single case between the two economies.

 

According to statistics from the Ministry of Commerce, the EU is not only China's largest trade partner but also a major source of dumping charges against China.

 

(China Daily April 7, 2006)