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China Complains To WTO On EU Shoe Tariffs

Tuesday, February 9, 2010

China has followed through on its threat last December to lodge a formal complaint against the European Union (EU) with the World Trade Organisation (WTO) about the extension of anti-dumping duties on Chinese made shoes.

The duties were first imposed by the EU in 2006 and extended by a further 15 months in December 2009. They were applied at rates ranging from 9.7% to 16.5% on Chinese imports and 10% on shoes from Vietnam.

China's Ministry of Commerce issued a statement asking the EU to take seriously China's strong concerns and properly resolve the dispute over shoe tariffs through consultation at an early date. If no negotiated solution is reached within 60 days, a WTO panel of three will adjudicate on the merits of the case, and make an appropriate order on the parties.

In volume terms this is the biggest dispute involving China, and a sign of its preparedness to use the levers of international bodies to further its trade interest, now that it has overtaken Germany to become the World's largest exporter.

The European Footwear Alliance, representing many of the footwear brands that have transfered their production to China, claims its members had paid around EUR800m in antidumping duties and that the EU anti-dumping measures were based on 'flawed analysis'.

The Chinese are reported to have hired the best lawyers and the message has been put out that they have a strong case. The EU itself appeared in two minds in taking its actions and appears to be responding to heavy lobbying from Italy.

In 2009 China opened a permanent WTO mission in Geneva and initiated its first legal complaints against the EU in respect of Chinese exports of iron and steel fasteners.

This last week China also announced anti-dumping duties of its own against American chicken products from February 13. According to China Daily, US exporters Tyson Foods and Pilgrim's Pride Corp will be levied duties of 43.1% and 80.5% respectively. Firms that did not respond to the Chinese investigation would be levied duty of 105.4%.