EU Levying Anti-Dumping Duties On Macao Shoes

In March 17, 2008, members of the European Union voted for a regulation to impose anti-dumping duties on leather shoes from the Macao Special Administrative Region.

Since October 7, 2006, the EU has imposed a definite anti-dumping duty on leather shoes from the mainland and Vietnam for a period of 2 years, and the relevant measures will expire on October 7, 2008.

The Chinese mainland enterprises must pay 16.5% anti-dumping duty, except one.

The 16.5% tax rate will apply to leather shoes imported from Macao.

The European Commission has expressed concern that since the EU imposed anti-dumping duties on shoes in the mainland and Vietnam, the footwear exports from Macao to the EU have increased to 4 times.

The European Commission believes that because of the limited production facilities in Macao, unless such shoes are re exported from other parts of the region to Macao, it would not be possible to record such a huge increase.

Therefore, the European Commission has launched an investigation on its own to circumvent anti-dumping measures (including pshipment via Macao or assembly in Macao).

The European Commission points out that mainland Chinese operators have been using Macao as an export platform for their products so as to avoid paying anti-dumping duties on leather shoes.

At present, sports shoes and any shoes involving special technology are exempt, but it means that the European Union will investigate this kind of shoes in the future.

On the other hand, Macao shoe manufacturers questioned the rationale of the regulation.

They insist that, given the EU's Taxation on footwear in the mainland and Vietnam, Macao businessmen have increased their footwear exports to the EU to meet demand. But in fact, Macao's shoe exports are few and long-term trade trends show that exports are decreasing.

Macao producers stressed that the increase in footwear exports from Macao to the EU should not be caused by the evasion of anti dumping duties by the operators. The shoes exported from Macao now all come from Macao and conform to the rules of origin of Europe.

They also pointed out that the EC did not act in accordance with WTO regulations and failed to conduct a comprehensive and appropriate anti-dumping investigation on dumping and damage suffered by EU producers.

In 2006, the EU imposed anti-dumping duties on Chinese mainland and Vietnamese shoes, which had caused strong protests by members of the EU and Asian producers who advocated free trade.

Importers and retailers believe that the increase in the cost of footwear will increase the financial burden of the poor families in the European Union.

The EU action is another indication that the EU's revision of its trade defence policy is far from over, and that protectionist member states continue to hinder the EU's introduction of a more open trade policy.

Most member states support anti-dumping duties on leather shoes in Macao, including France, Portugal, Spain, Greece, Italy, Romania, Hungary, Germany, Slovenia, Bulgaria, Estonia and Poland; and more open member states in northern Europe have objected, including Britain, Sweden and Holland.

The details of the regulations remain to be announced, and the EU is expected to impose anti-dumping duties on shoes in Macao in the near future.

The European Commission will also continue to monitor the import of leather shoes in the mainland and Vietnam.

Although the anti-dumping duty on footwear is due to expire on October 7, 2008, it is widely expected that the EU shoe industry will ask the European Commission to review the expiration date to decide whether to extend the relevant measures.