The new European Footwear Alliance, which represents the sports and outdoor brands in addition to many others in the casual footwear sector, is understood to be filing a statement to the European Commission urging it to conduct a speedy investigation of the European shoe producers’ claims of continued dumping by Chinese and Vietnamese manufacturers of leather shoes, proposing India as a more suitable reference country rather than Brazil in order to calculate actual manufacturing costs.
The alliance is a new lobby formed last month among various interest groups to oppose the review of the anti-dumping duties imposed on these products two years ago by the European Union. However, their last-minute efforts were thwarted on Oct. 3 when the European Commission announced in its Official Journal that the duties would remain in place after Oct. 7, pending the new investigation, in spite of the unexpected support given by a majority of the member governments of the EU for their termination (see previous issue of SGI Europe). The notice in the journal invites associations as well as individual companies to state their views on the issue by requesting to respond before mid-November to a questionnaire that can be sent to them by the European Commission.
The Confederation of the European Shoe Industry (CEC), which purports to represent European shoe producers, warned that the European Commission had a legal obligation to go ahead with the investigation based on new evidence of dumping submitted just before the deadline for a decision on the so-called expiry review. Returning from a trip to Beijing, the rather liberal-minded Peter Mandelson, who is leaving as European Trade Commissioner to join the British government again today as secretary of state for business, indicated that he had no choice in view of possible sanctions by the European Court of Justice.
This means that importers of shoes with leather uppers from China and Vietnam into the EU will have to continue to pay anti-dumping duties for up to 12 more months, maybe even 15 months. It’s not sure whether they are going to be refunded if the new investigation determines that there is no dumping. If dumping is proven again, the duties will continue for three years, or even for five years as demanded by European producers, but there may be some adjustments in the duty levels if any party requires a separate investigation to this effect.
For the time being, the anti-dumping duties are still set at 16.5 percent for leather shoes from China and 10.0 percent for leather shoes from Vietnam. They come on top of the regular import duties. Shoes from Vietnam have been entering the EU with a discount of 30 percent on the regular duties, which amount to 8 percent for leather shoes and 17 percent for other types of shoes, but the discount will be eliminated as of next Jan. 1 because the country no longer enjoys most-favored-nation status.
The anti-dumping duties don’t apply to performance athletic shoes covered by the so-called STAF exemption, but outdoor shoes and a variety of relatively casual styles marketed by the sports brands fall under the general rule. A change of this definition is not excluded, but not in the immediate future.
The European Footwear Alliance is an informal combination of the Federation of the European Sporting Goods Industry (FESI), the European Outdoor Group (EOG), the European Branded Footwear Coalition (EBFC) and the Federation of the German Footwear Industry (HDS). The EBFC is an informal group comprising major shoe companies including Camper, DC Company, Diesel, ECCO, Timberland, Rockport, Wolverine World Wide and Deckers Corporation. While CEC represents only the shoe companies that continue to make shoes in Europe, the Alliance is meant to represent the more numerous companies that get them made or would like to get them made outside the EU sooner or later. Officials of FESI are wondering whether their interests are actually taken into account.
Martín Truyols, general counsel of Camper, said in a statement in behalf of the European Footwear Alliance that it was welcoming the prospect of having the duties “promptly reimbursed.” Importers are in fact hoping that they will get refunded for the duties that they will continue to pay from Oct. 7 onward in case of a negative outcome of the review. A spokesman for the Commission said the issue of a possible refund will only be analyzed at the end of the investigation.
Under the rules of the World Trade Organization, the new review must last a maximum of 12 months, which can be extended to up to 15 months if there are sufficient grounds. There have been indications that the investigation may only take about seven months. In a public statement, the Commission only said that the responsible services will work to complete the investigation "as expeditiously as possible." It seems in fact that it will use three teams instead of one to complete it sooner (more in Shoe Intelligence).
