The EU is planning to impose anti-dumping duties on imported footwear from China and Vietnam, after imports exceed a certain quantity. As of April, the EU has applied provisional anti-dumping duties on leather footwear. The provisional duties of 19.4% for China and 16.8% for Vietnam and apply to all imports.
Recently, the European Commission proposed that these provisional anti-dumping duties should be replaced by a so called Delayed Duty System (DDS) as of October. The DDS would mean that only imports which exceed a certain threshold will face anti-dumping duties. However the proposed duties will be higher: 23% for Chinese footwear and 29.5% for Vietnamese footwear. The thresholds set by the Commission before any anti-dumping duties will apply amount to 140 million pairs from China and 95 million pairs from Vietnam, which respectively amounts to 80% and 92% of the 2005 import levels of these countries.
The Footwear Association of Importers and Retail chains members are disappointed that the duty-free imports do not coincide with the 2005 import volume, the first year with quota free trade. In addition, it seems that the duty free import volume will not grow during the next five years.
“While F.A.I.R. remains opposed to these anti-dumping measures in principle, since they seriously restrict trade, F.A.I.R. is nevertheless willing to consider the delayed duty proposition under certain conditions” said Paul Verrips, Secretary General of the Footwear Association of Importers and Retail chains (F.A.I.R.). “At least the delayed duty system is predictable and affects all market participants in an equitable fashion. F.A.I.R. will therefore be able to support the delayed duty system, albeit reluctantly, so long as the original proposition is not diluted or materially altered.”
Verrips emphasizes that, “it goes without saying that the duty free quantity allowed should adapt to the developments in the market including the increasingly outsourced EU production output.”
Furthermore, F.A.I.R. considers that it is problematic to initially base the allocation of the duty free quantity on a “first-come, first served” basis. Under the Commissions proposal, it is only as of 2007 onwards that the allocation will take place on the basis of a company’s individual 2005 import data and therefore become transparent. “Basing the duty free quantity on 2005 import volumes and allocating it to companies with imports during that year would be a workable starting point. A special arrangement for 2006 alone will result in a costly and confusing situation.” Therefore, F.A.I.R. suggests that the allocation should directly be based on the import data of 2005.
The new arrangement, according to the F.A.I.R., would also make the collection of provisional anti-dumping duties unnecessary, since the two regimes fundamentally contradict each other. Verrips explains: “Duties should not be collected on import volumes which, are recognized by the Commission, have not caused injury.”
“Yes, of course we are disappointed that the Commission could not bring itself to completely abandon protectionist measures. Only abandoning these measures completely would have been a truly acceptable outcome, especially in the light of long term market developments, and the serious legal shortcomings in the anti-dumping investigation. Furthermore, we are still convinced that the anti-dumping duties are of no use to the EU producers themselves. However, the current proposal would at least create a transparent and predictable framework allowing our members to engage in planning their business activities without fear of further destruction.”
