The EU Member States are gearing up for a tough round of discussions in upcoming Anti-Dumping Committee meetings, especially the one planned for 19 November 2009. By all accounts, the Commission is set to shortly propose a 15 month extension of anti-dumping duties on footwear with leather uppers from mainland China and Vietnam, at the existing rates of 16.5% and 10% respectively.
Nonetheless, that is only the beginning of the story: with frank words being exchanged from within industry – including global retailers that include Adidas, Puma, Sebago and Timberland, all of whom are said to oppose the extension of duties – the Member States are likewise fiercely divided, with the usual leading protectionist Member State, namely Italy, pushing for the measures. It is therefore by no means certain that the extension will be accepted, as a majority among the Member States must be formed in order to push them through.
Hong Kong’s shoemaking industry with operational units in mainland China will already be only too familiar with the current anti-dumping duties, in place since 2006, pursuant to intense pressure at that time, from a coalition of Community shoe manufacturers and governments, led by Italy. Over recent months, opposition to the measures has grown, and there is set to be a showdown when the Member States meet on 19 November to, it is expected, vote either in favour or against the extension of the measures. The anti-dumping committee may discuss the footwear duties at an earlier November meeting, but the one on 19 November has been scheduled, according to sources, mainly for that purpose.
Certainly before that date, various representative bodies will continue vociferous lobbying either for or against the measures in a bid to influence the decision. EuroCommerce and the Foreign Trade Association (FTA), representing retailers and importers, are avidly against them. Among other arguments, the FTA has raised the issue that the duties are pointless as the EU industry’s difficulties are not related to shoes from the Chinese mainland or Vietnam. European producers’ competitiveness problems are more probably linked to negative export performances, changing customer preferences and structural inefficiencies than to alleged dumping practices.
The FTA also decries the fact that the Commission appeared to grant less importance to importer, retailer and consumer interests than those of the domestic manufacturing industry. EuroCommerce criticises the current stand-off for “perpetuating protectionism”, arguing that the European market has “languished for years behind artificial, politically motivated trade protections” and that “anti-dumping duties severely affect EU importers, retailers and consumers”. Hong Kong sellers may like to know that interested parties in the footwear proceeding have until 3 November 2009 to provide their comments, thereby intensifying the debate before a final decision is made.
On the Member State front, alliances have been formed both for and against the proposed extension of the anti-dumping measures. Some traditionally free-trade minded Member States, spearheaded by the UK and counting the Netherlands, Sweden, Finland, Estonia, Latvia, Luxembourg and Malta are keenly against extending the measures, while Italy, France, the Czech Republic, Slovenia and Lithuania are among those in favour.
Indeed, at this stage of the procedure, more Member States are against extending the measures, which will no doubt come as a relief to Hong Kong’s shoe exporters with interests in the mainland. However, depending on lobbying tactics and the political ramifications within and between the Commission and Council, this scenario could change. If there is a change and duties are to be extended, the Commission would make a formal proposal at the end of November which will have to be approved by the Council of Member States within 30 days. Thereafter, the measures will be extended as from 3 January 2010 onwards for 15 more months.
On another important trade defence matter, Hong Kong traders may note with interest that the Chinese mainland requested a dispute settlement panel at the WTO to adjudicate on the EU’s anti-dumping measures on imports of certain iron or steel fasteners originating in the Chinese mainland. The measures were published in the EU’s Official Journal on 31 January 2009, imposing duties on the products concerned in the range of 0 to 85%, with a five year applicability. According to the Commission, the measures are the result of its thorough investigation which established clear evidence of dumping that was harming an otherwise healthy EU industry. Mainland China has, on the other hand, alleged that the EU is violating various provisions of the WTO Anti-dumping Agreement. On 23 October 2009, WTO Members agreed to establish a WTO dispute panel as per the mainland’s request.
