"Macao Shoes": European Wandering Under The Shadow Of Anti-Dumping

The EU's action once again shows that the EU's revision of trade defense policy is far from over, and protectionist member states continue to hinder the EU's introduction of a more open trade policy.

Recently, the EU member states voted on a 16.5% anti-dumping duty regulation on leather shoes from Macao, including France, Portugal, Spain, Greece, Italy, Romania, Hungary, Germany, Slovenia, Bulgaria, Estonia and Poland. Most countries such as the United Kingdom, Sweden and Holland expressed their opposition. The regulation was passed.

In this way, the EU launched an anti circumvention investigation launched last year on the export of Chinese leather shoes to Macao.

The details of the regulation are not yet published, but the EU is expected to impose anti-dumping duties on Macao shoes in the near future, while the EU will continue to monitor the import of leather shoes in the mainland and Vietnam.

Since October 7, 2006, the EU has imposed a definite anti-dumping duty on leather shoes from the mainland and Vietnam for two years, becoming the largest EU anti-dumping case against China.

EU: exports to Europe increased by 4 times.

The EU believes that since the EU imposed anti-dumping duties on leather shoes in the mainland and Vietnam, the export volume of Macao shoes to the EU has increased by 4 times. Due to the limited production facilities in Macao, unless there are large numbers of shoes exported to Macao in other countries and regions, there can be no such huge increase.

Last year, the EU launched its own investigation on circumvention of anti-dumping measures by shoe companies. It has been discovered that Chinese traders have been using Macao as an export platform for their products so as to avoid paying anti-dumping duties on leather shoes.

The EU imposed anti-dumping duties on Chinese and Vietnamese shoes in 2006, which has caused strong protests from the EU's free trade members and Asian producers.

EU importers and retailers believe that the introduction of anti-dumping duties to increase the cost of shoes will increase the financial burden of the poor families in the EU.

Manufacturer: comply with rules of origin

Since the EU's decision to impose anti-dumping duties on leather shoes from Macao is not final, the Macao SAR government has hired a legal adviser to study the relevant issues and explain the EU's concerns.

The SAR government has been very concerned since the European Union launched an investigation into the anti dumping measures taken by Macao's footwear companies last year.

When the European Union conducted the investigation, the Macao Economic Bureau organized the relevant manufacturers to actively cooperate and explain.

Macao shoe manufacturers said that because of EU's Taxation on leather shoes in the mainland and Vietnam, Macao operators increased their exports to EU shoes to meet demand.

At present, all shoes exported from Macao originate from Macao, which is in line with the rules of origin of Europe. The increase in Macao's export of European shoes is not caused by Macao's evasion of anti-dumping duties.

The EU failed to act in accordance with the WTO rules and failed to conduct a comprehensive and appropriate anti-dumping investigation on dumping and damage suffered by EU manufacturers.

However, some manufacturers take a wait-and-see attitude, and worry that the EU levying anti-dumping duties on Macao shoes is not only leather shoes, but also all shoes.

In response to frequent investigations by the European Union, some manufacturers refused to cooperate, preferring to give up.

Some manufacturers are very difficult to take orders at present, and some manufacturers are preparing to shrink their local production lines because of their operational difficulties.

Industry analysts said that before the EU took anti-dumping measures on leather shoes in the mainland and Vietnam, many shoe factories moved the factories to the mainland to reduce production costs. Macao's footwear exports continued to decline. After the EU imposed tariffs on the mainland's shoes, some Macao manufacturers' production lines in the mainland returned to Macao, resulting in an increase in export volume.

The EU will extend the scope of the anti-dumping duty to Macao, which will add to the difficulties for Macao shoe companies that have already been in difficulty.

Mainland enterprises: a positive attitude

The Chinese government departments concerned have been conducting relevant investigations in advance for fear that the EU investigation may hurt the innocent, so as to safeguard the interests of the shoe enterprises in normal trade between the mainland and Macao.

During the investigation, the mainland shoe manufacturers requiring factories in Macao should manage the raw data and data in order to cope with the verification.

The China Leather Industry Association said that since the EU launched an investigation last year on circumvention of anti-dumping measures by Macao shoe enterprises, the association has been concerned about the mainland's shoe enterprises' re export to Macao. However, the EU and China have no uniform stipulation on the rules and value judgments of the origin of leather shoes. Macao shoes exported to the EU are not all evasion, and some belong to the normal trade category.

The association has also repeatedly reminded enterprises to regulate trade practices and not damage the entire shoemaking industry.

In view of the current situation, some enterprises in the mainland hold a positive attitude. They believe that many enterprises in the same trade have gone round to Macao to export leather shoes to the EU, but the proportion of the EU's total exports of leather shoes to China is very small.

Some European shoe traders believe that the anti-dumping duty only has a two-year period and has little impact on orders.

Worst result: extension of anti-dumping duties

Some experts believe that Macao shoe enterprises are basically affiliated enterprises of the mainland enterprises. There are mainly two forms of expression: first, they do not produce in Macao at all; they only get the certificate of origin or OEM through improper means; two, they finish the bonding process in Macao, or pport their shoes to Macao, and only finish the final packaging in Macao.

Thus, the leather shoes originally produced by the mainland can have third party status or origin labels through the re export of Macao, thereby circumventing the punitive tariffs imposed and imposed by the European Union on anti-dumping duties on the Chinese footwear industry.

According to the European Union's stipulation of the identity of the third country or the label of origin, only when the added value of the local production must reach over 25% of the value of the product, can the certificate of origin be approved by the European Union. Obviously, the above two conditions can not meet the EU standards.

The EU's anti-dumping measures on Macao shoe enterprises have great influence on the above mainland enterprises.

There are also businessmen who believe that domestic shoe companies involved in anti circumvention investigations are mainly small businesses. Large enterprises do not have evasion because of their strict and professional export channels to the EU.

All the mainland shoe enterprises in Macao have no evasive behavior. Some enterprises have set up regular processing factories in Macao, and the production value is very large. The shoes they produce are re exported to Europe and are fully in line with the normal trade category.

The most important thing for an enterprise is to improve the quality of products, attach importance to increasing the added value of products, and not be lucky enough to act in violation of international trade rules for shortcuts.

Although the EU imposed anti-dumping measures on Chinese and Vietnamese shoes in October 7th, the EU has issued a notice that the relevant industries in the EU can apply in writing 3 months before the expiration date to examine whether the original anti-dumping measures should be extended.

The EU's anti circumvention in Macao will affect the outcome of the EU's anti-dumping case against China's leather shoes this year. The worst result is the possibility of extending anti-dumping duties.

The anti circumvention investigation is an effective means for the EU to ensure the continuous damage of anti-dumping measures. It not only ensures the continuous effectiveness of the 16.5% anti-dumping duty on Chinese footwear enterprises, but also may impose anti-dumping duties on the parts of the entrepot countries, assembly countries or products involved.

Way out: seek breakthroughs in the second round of litigation

The EU's action once again shows that the EU's revision of trade defense policy is far from over, and protectionist member states continue to hinder the EU's introduction of a more open trade policy.

In fact, the EU's concern about the trade figures between China and Europe has lasted for a long time. From the anti-dumping investigation case of up to 12 in 2006, to the anti-dumping case of textile quotas in 2007, and then to the anti-dumping investigation of citric acid and MSG in the early September of that year, the EU's anti-dumping duties continued, the European Union took the anti-dumping stick under the stimulation of "trade figures", and the anti circumvention investigation was only a means to continue the effectiveness of the anti-dumping duty.

After the EU imposed 16.5% anti-dumping duties on Chinese leather shoes for two years, the number of exports from the mainland to Europe declined, and the price of leather shoes sold in the European market continued to rise. However, Chinese leather shoes still do not seem to see the hope of breaking away from EU trade barriers.

In September 2007, the European Union suspected that China's export of European leather shoes had been circumventing Macao's pshipment. It announced that it would register and conduct anti circumvention investigations on imported footwear products imported from Macao.

But only a few Chinese shoe companies such as AOKANG group, Wenzhou Tamar, Guangdong golden shoe and new HK dollar have completed the first round of defense against the EU anti-dumping lawsuit.

According to the European Union's anti-dumping judicial procedure, in the second round of defense procedures, the Chinese enterprises will mainly defend the defense points raised by the accused party in the first round of defense, such as the technical problems of dumping calculation, and how to apply the sampling investigation procedure.

Despite the successful entry into the second stage of anti-dumping litigation, the situation is not clear.

Chinese shoe companies will strive to achieve breakthroughs in the second stage of the judicial process.

But the industry believes that the substantial changes in China's shoe companies are not yet seen, and the road to anti-dumping is still long.