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First appears on Ohmynews on 2006-10-08 11:58 (KST)

Chinese makers and E.U. importers threaten legal action

The anti-dumping levy imposed by the European Union on leather shoes from China and Vietnam, which came into effect Saturday, faces strong criticism from the two countries as well as local importers.

China called the anti-dumping measures illegal and threatened to retaliate. In a press conference Thursday, Commerce Ministry spokesman Chong Quan said, "The anti-dumping measures taken by the E.U. against Chinese leather shoes lack a legal basis and factual evidence and harm the rights of Chinese leather shoe manufacturers."

He noted that the investigation into the dumping and the adjudication procedures taken by the E.U. did not conform to anti-dumping regulations of either the E.U. or the World Trade Organization.

"The Chinese side will closely watch this issue and see how it develops and will maintain the right to take corresponding measures," Chong concluded.

Several Chinese and E.U.-based companies that manufacture in China are also considering legal action. James Searles, a lawyer representing Chinese manufacturers, said: "We are looking at legal options. The political pressures applied in this case were intense and unrelated to the merits of the case."

Leather shoes from China will be subject to 16.5 percent levy on E.U. markets.

Vietnam, another country affected by the decision, also raised its voice against the anti-dumping duties on Vietnamese leather shoes.

The spokesman of Vietnamese Foreign Ministry Le Dung on Friday called the decision unfair and said it runs counter to the free trade policy initiated by the European Commission.

"The imposition of anti-dumping duties only aims to protect interests of some unqualified producers in the Europe while causing losses for majority of consumers and retailers," he said.

He once again confirmed Vietnam did not dump leather shoes and called on the E.U. to abolish the measures as soon as possible, for the sake of E.U. consumers and Vietnamese manufacturers.

From Saturday, shoes from Vietnam will be subject to a 10 percent tariff in E.U. markets instead of 16.8 percent -- the temporary duty imposed since April.

The cost of shoe penalties to the Vietnam leather industry has yet to be assessed. However, it will surely affect the jobs of tens of thousands of workers in the industry and push hundreds of small-scale enterprises to bankruptcy.

Nguyen Gia Thao, president of Vietnam's Leather and Footwear Association (LEFASO), said up to 70,000 workers could lose their jobs. Even two-year duties would see many companies switch suppliers.

"The E.U.'s anti-dumping measures will not only cause difficulties for more than half a million Vietnamese workers in the leather and shoe industry, but also for many others whose jobs service the industry and who are already living under the poverty line," Thao said.

According to LEFASO, the footwear industry employs half a million workers directly and creates about 1 million associated jobs. Women account for 80 percent of the workforce.

In 2005, total shoe exports reached US$3 billion, of which the exports to E.U. markets were worth $1.8 billion. In the first nine months of 2006, Vietnam footwear exports were worth $2.64 billion, an increase of 21.4 percent over the same period last year.

However, the strongest reaction came from E.U. importers, who will face higher imports prices.

The Financial Times quoted Paul Verrips, chief executive of the Footwear Association of Importers and Retail chains (FAIR), as saying, "Not only this decision but the entire investigation is characterized by a variety of procedural errors. We have consistently pointed this out. Currently we are checking into possibilities for legal action."

FAIR includes retailers and manufacturers such as Clarks of the U.K., Columbia of France and Wortmann of Germany.