Financial Times (Oct. 5, 2006).

EU faces double court threat on shoe tariffs.

By Andrew Bounds in Brussels

Both China and European companies on Thursday said they might take legal action against what they described as the European Union’s flawed and illegal decision to slap anti-dumping tariffs on Asian shoe imports.

The Chinese commerce ministry said: “The anti-dumping measures taken by the EU against Chinese leather shoes lack a legal basis and factual evidence and harm the rights of Chinese leather shoe manufacturers. The Chinese side will closely watch this issue and see how it develops and will maintain the right to take corresponding measures.”

Beijing said the procedures followed by the EU did not conform with the anti-dumping regulations of either the EU or the World Trade Organisation. It has threatened to take legal action at the WTO in the past over the case. Several Chinese companies and EU-based ones that manufacture in the country are also considering using EU courts.

Paul Verrips, chief executive of the Footwear Association of Importers and Retail chains (Fair), said: “Not only this decision but the entire investigation is characterised by a variety of procedural errors. We have consistently pointed this out. Currently we are checking into possibilities for legal action.”

Fair’s members include both retailers and manufacturers such as Clarks of the UK, Columbia of France and Wortmann of Germany.

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.”

Italy and France lobbied for months to convince fellow EU states to back duties. Nine voted in favour, four abstained and 12 were against. Abstentions count as a Yes vote.

The companies and some EU member states, such as Denmark, describe the European Commission’s use of Brazil as a market of reference to compare prices with China’s as illogical. They also say currency variations were not taken into account in the 2005 report. Peter Mandelson, European trade commissioner, said Chinese and Vietnamese companies were engaging in unfair trade because they benefited from cheap bank loans and other subsidies.

EU justice ministers yesterday confirmed levies of 16.5 per cent and 10 per cent on Chinese and Vietnamese leather shoes, whose average price is €8 ($10) a pair, respectively for at least two years. It should put more than €1 on the price of each pair of imported shoes.

Nguyen Gia Thao, head of the Vietnam Leather and Footwear Association, was quoted by the official Vietnam News Agency as saying that up to 70,000 workers could lose their jobs. Even two-year duties would see many companies switch suppliers, he said