Importers of hiking boots in the European Union can breathe a sigh of relief as the European Commission has finally decided to close the review of a complaint lodged one year ago by European manufacturers of safety footwear, charging dumping by competitors in China and India. On the other hand the Commission is largely expected to propose at a meeting next July 20 some important changes in the anti-dumping duties on other kinds of leather shoes from China and Vietnam, which will stick for the next five years if the EU Council of Ministers supports them after the summer holidays.
The safety shoe complaint initially covered a broad range of shoes with a protective toecap in various materials, including certain hiking boots and regular sports shoes. Intense lobbying by the Federation of the European Sports Industry (FESI) and by FAIR, a young association of footwear importers, persuaded the anti-dumping authorities in Brussels to limit the scope of the investigation, and subsequently to stop the procedure altogether.
FESI has apparently also succeeded in getting performance sports shoes to continue to enjoy the so-called STAF exemption from any kinds of import measures, as they are not manufactured in Europe. However, a previous exemption granted for children’s footwear is likely to be cancelled.
The two exemptions have been applied to the provisional anti-dumping duties introduced by the European Commission last April, which started off at 4.8 percent for China and at 4.2 percent for Vietnam. They were set to grow gradually to 19.4 and 16.8 percent, respectively, hitting street leather shoes as well as the non-technical lifestyle items of Adidas, Nike and Puma, and most of those of brown shoe brands like Merrell or Timberland. While Italian shoe producers found that they were insufficient to protect their industry, numerous interest groups found these measures excessive.
According to numerous sources, it is likely now that the Commission will end up proposing the equivalent of a new quota system, restoring in effect the situation that existed before the Chinese import quotas were lifted at the end of 2004. Anti-dumping duties would be levied only on the quantities that will be imported above certain specific annual levels. This system of so-called “deferred duties” or “delayed duties” was going to apply only to Vietnam, but it now seems almost certain that it will affect China as well, partly due to political considerations.
According to certain sources, the maximum limits for this year or next will be set at 140 million pairs for China, or 68 percent of the non-technical leather footwear imported into the EU in 2005, and at 95 million pairs for Vietnam, corresponding to 79 percent of 2005 imports. If importers bring in additional footwear beyond these levels, they will be charged anti-dumping duties of 23 and 29.5 percent from these two respective sources. Officials of FESI and large retailers appear to support the principle of this form of protection, but they are waiting for a final announcement before making a statement.
Meanwhile FESI has announced that New Balance has joined the association as a regular member. Another company joining the federation recently from another sector is Siport, which licenses character children’s footwear under famous names such as Barbie, Fisher-Price, Hot Wheels and United Colors of Benetton. The Italian company, which sells around 5 million pairs a year, joined FESI to help it to avoid the anti-dumping duties on China and Vietnam that have been advocated by many other Italian shoe firms.
