EU imposes new tax on Chinese shoes

The European Commission yesterday imposed a progressive new tax on leather shoes imported from China and Vietnam, a move likely to push up the price for consumers.

The measure follows a preliminary Commission investigation that identified clear evidence of disguised subsidies and unfair state intervention in favour of the leather footwear sector in both countries.

Malta, Slovakia and Belgium were the only three countries that came out in support of the Commission's proposal. Eleven other member states, led by Italy, abstained, arguing in favour of an even stricter form of taxation. According to EU rules, an abstention in this area means a vote in favour and the Commission therefore got overall clearance for its proposal. Statistics show that last year, the EU imported 1.2 billion pairs of shoes from China and 265 million pairs from Vietnam.

The Commission said that in order to minimise any sudden impact on imports, the duty will be imposed progressively over a period of five months, beginning at four per cent on April 7. It will rise to 16.8 per cent for leather shoes from Vietnam and 19.4 per cent for leather shoes from China - a duty sufficient to correct the harm caused to European producers by dumping.

The temporary measures exclude children's leather shoes to ensure that even the small price rises are not passed on to poorer families.

EU Trade Commissioner Peter Mandelson said it was important that the EU acts against unfair trade while encouraging legitimate and competitive practices from emerging economies.

China has objected to the move and has already appealed to the EU to reconsider. It says the measure is unfair and there is no evidence of dumping. It also questions whether the new tax conforms to World Trade Organisation rules.