Dec 22, 2009
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EU extends penalty taxes on Chinese, Vietnamese shoes

Dec 22, 2009

BRUSSELS (AFP) – The European Union, the world's biggest market, decided to prolong punitive taxes on imports of Chinese and Vietnamese shoes for 15 months, a source said.

Photo : AFP

The extension of anti-dumping duties, first introduced more than three years ago and hotly contested by Beijing, was agreed by member states despite protests led by Britain, the European source told AFP.

It was passed into law when EU environment ministers met on Tuesday 22 December -- the last opportunity for it to be formalised.

A decision on whether to extend the duties had to be reached by the end of this year.

The penalty taxes were applied in retaliation against Asian footwear being sold in Europe at below production cost.

Discussions over the extension proposed by the European Commission, the body that polices and regulates the single market, saw 15 of the EU's 27 member states speak out last month against the plan.

However, Austria, Germany and Malta have since switched positions and decided to abstain, allowing the measure to pass by a simple majority.

A European faultline on the issue has run between its economically liberal north, hostile in principle to anti-dumping measures, and the more protectionist south, sympathetic to fears that cheap Chinese imports could undermine EU producers.

Britain and six other countries who wanted to drop the duties expressed their regret, a European diplomatic source said.

The anti-dumping measures in the EU -- home to half a billion people -- see import duties of 16.5 percent levied on Chinese shoes with leather uppers and 10 percent on the same kind of shoes from Vietnam.

They cost manufacturers with operations in those countries hundreds of millions of euros (dollars).

Bigger manufacturers that make their shoes in Asia such as Diesel, Adidas and Puma, also fought against the renewal of the shoe tariffs.

Figures from the European Commission show that Chinese and Vietnamese shoes make up 30 percent of the EU footwear market.

China earlier this month expressed its "strong dissatisfaction" with the levy which it said was "inconsistent with World Trade Organisation rules and unfair and untransparent."

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