EU is unable to break logjam on Chinese shoe tariffs

European Union ambassadors failed to bridge differences over duties on shoe imports from China and Vietnam, just days before the end of temporary tariffs that have divided Spain and Italy from free traders such as Sweden. The existing six-month tariffs will disappear October 7 unless EU ambassadors or ministers can agree next week to continue with measures to prevent the two Asian nations from selling footwear in Europe below domestic prices or below the cost of production. Should the duties end, Spain and Italy may seek different ways of halting the imports to protect their own shoemakers. So far, a group of free-trade countries has formed a majority to block a proposal by EU Trade Commissioner Peter Mandelson for a five-year levy of 16.5% on some Chinese leather shoes imports and a 10% duty on shipments from Vietnam. The temporary tariffs are 19.4% on Chinese footwear and 16.8% on Vietnamese imports. „The commission proposal remains on the table,” said Peter Power, Mandelson's spokesman. If governments can agree on a solution „that will command majority support, the commission will look favorably on this,” he told reporters in Brussels.

A compromise put forward by Austria calls for the EU to impose the tariffs and review them a year later. That proposal „is misleading and would simply mean five-year duties by the back door,” the British Retail Consortium wrote in letter earlier this month to the UK government. The organization's members include Timberland Co. and C&J Clark Ltd. Other proposals, including a suggestion yesterday by France for a two-year measure, haven't generated backing from the majority of governments needed for an alternative to the commission plan. The Federation of the European Sporting Goods Industry lauded the „continued resistance” of EU governments to anti-dumping duties that, it said, would harm consumers, importers and retailers without solving the structural competitiveness problems of the companies that favor such measures. „The majority against the duties held up despite intense political pressure by the protectionist countries,” Horst Widmann, the federation's president, said in an e-mailed statement. „This shows there is a core of European governments which care about the interests of consumers and competitive businesses.” China supplied half of the 2.5 billion pairs of shoes sold in Europe last year, triggering calls for protection by the EU's 8,000 leather-shoe manufacturers, mainly small businesses concentrated in southern Europe. While four-fifths of the EU's leather shoes come from Italy, Portugal and Spain, some of those shoemakers employ fewer than 10 people. (Bloomberg)