Chinese exporters lose out. European manufacturers in China lose
out. European exporters lose out. And European consumers lose
out.
The provisional tariffs slapped on Chinese leather shoes by the
European Union (EU) are a lose-lose situation which must be turned
around, a top Commerce Ministry official said yesterday.
The EU was not justified in imposing the anti-dumping penalties
because 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 and gradually rise from 4.8 percent to 19.4 percent by
October, when a final decision is expected.
"The EU declined to grant market economy status to 13 firms it
investigated on the spot. But all of them are privately-owned or
foreign-invested, and comply with the criteria for market economy
treatment," said Gao, also the ministry's international trade
negotiation representative.
"It also denied market economy treatment to non-sampled
companies, about 150 or 90 percent of the total respondents,
without giving any explanation," he added.
The EU began to give market economy status to some Chinese firms
in anti-dumping cases in 1998. As China has not yet been recognized
as a full market economy by the EU, the status helps individual
companies gain access to the European market.
The EU violated not only World Trade Organization anti-dumping
rules but also its own laws and anti-dumping procedures, Gao said,
because none of the 160 respondents had received disclosure from
the EU on their claim for individual treatment.
The EU's determination on dumping and injury in the case lacks
enough evidence, he said.
Shoemaking is a labour-intensive industry in which China enjoys
comparative advantages in terms of labour and resources; and the EU
should not arbitrarily regard the price advantage of Chinese
leather shoes as amounting to dumping, he said.
"Most Chinese shoemakers are small- and medium-sized companies
that are not able to dump goods in the EU market," he added.
He noted that the European petitioner listed only 6 of 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 has been done to the EU industry, there is 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 impair the profits of EU footwear producers and investors in
China," Gao said.
Chinese footwear exports are basically low- and middle-end
products, while the EU produces mostly high-end goods, he said.
"Meeting different needs of consumers, the two kinds of products
are not in direct competition; and have obvious differences in
sales channels and market segmentation. 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 generate lucrative returns
for EU importers and retailers and provide a large number of jobs
in the economic bloc.
The development of the Chinese footwear industry also ensures EU
exports of shoe-making 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 shoe-making machines from the EU in 2004, up 26
percent year-on-year.
Gao urged the EU to treat Chinese firms fairly and re-evaluate
the whole case to ensure the development of shoe trade.
Last July, the EU initiated anti-dumping investigations into
leather shoes worth US$730 million from China the largest single
anti-dumping 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)