EU announces antidumping penalties on China, Vietnam shoes

BEIJING (AFX) - In a move likely to increase trade tensions between Europe and China, the European Commission announced antidumping penalties on leather shoes made in China and Vietnam, saying the countries are getting unfair state subsidies, the Wall Street Journal reported.

The investigation resulted in evidence that China and Vietnam are subsidizing their shoe industries, allowing them to sell shoes at prices below production costs, at an average import price of 8.50 euro per pair of shoes. Sources inside the Commission familiar with the research say it leaves the Commission no choice but to impose tariffs. Brussels estimates that 4000 jobs were lost in the sector since 2001 due to dumping.

The European Commission has announced provisional duties of 19.4 percent on big-sized leather shoes from China and 16.8 percent on shoes from Vietnam.

The duties are far below the level that some European shoemakers had demanded, but are intended to avoid hurting European consumers, the person was quoted as saying in the report.

Some of the shoes that will be affected are those made in China for US and European companies.

The commission found that shoemakers in China and Vietnam didn't meet Europe's definition of fair trade because they receive cheap government financing, cheap rent for their factories and tax breaks, the report said.

The source in the report said a lengthy investigation produced what he called a 'clear finding of state intervention'.

He added that member states are expected to back the proposal.

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