EU Anti-Dumping Rules Against Chinese Leather Shoes

As influential in recent years

Geneva local time on April 20th, the Chinese delegation to the World Trade Organization (WTO) formally requested the WTO to set up an expert group to investigate and decide whether the EU anti-dumping measures against China's leather shoes are in violation of international trade rules.

At the meeting of the WTO dispute settlement body held on the same day, the Chinese Delegation pointed out that the anti-dumping measures adopted by the EU on Chinese leather shoes violated WTO related agreements, both in terms of procedure and in nature, and undermined the legitimate rights and interests of China.

In view of the fact that the latest round of consultations held by both sides in March 31st could not relieve China's concerns and find satisfactory solutions to both sides, China requested the WTO dispute settlement body to set up an expert group to ensure that the legitimate rights and interests of the Chinese side were protected.

The Chinese delegation urges the EU to correct its relevant legislative procedures in accordance with the WTO agreement and to terminate anti-dumping measures against Chinese leather shoes in violation of WTO rules.

At the meeting that day,

The European Commission "ruled for Adjudication".

As a case of trade friction that has been quite influential in recent years, the EU shoe case has been widely accepted by the industry as an exemplary influence on Sino foreign trade relations in the future.

In January this year, the EU Member States to the European Union

The result of the unexpected ruling is extremely dissatisfied with Chinese leather shoes manufacturers.

On February 4th, the permanent mission of China to WTO sent a letter to the WTO delegation of the European Union to initiate a request for negotiation under the WTO dispute settlement mechanism on the anti-dumping measures adopted by the EU on leather shoes in China, and formally activate the WTO dispute settlement procedure.

In accordance with the WTO dispute settlement procedures, the two sides then launched a two-day bilateral consultation on the case. In the absence of consultations, the prosecutor has the right to request the establishment of an expert group to investigate and decide on the dispute.

Guo Weiwen, Secretary General of the anti dumping union of China's European Union of leather shoes, told Nanfang Daily: "the European Commission is not fair in the case of" exporting EU shoes ". They are" ruling for Adjudication ".

Guo Weiwen said that the EU shoe case itself has many legal loopholes.

"Since 2006, we have been communicating with and understanding with the European Commission and people from all walks of life, including the original trial, the retrial and the final ruling. Among them, we have put forward many important legal viewpoints and grounds which have not been taken seriously. We think that this case has not been given fair and fair decisions."

Guo Weiwen said.

Yao Jian, spokesman of the Ministry of Commerce, told the case that the EU's anti-dumping investigations and rulings against Chinese leather shoes violated WTO rules and damaged the legitimate rights and interests of Chinese enterprises.

Rami, the director general of WTO, has said publicly that if China believes that the EU misquotes the WTO rules, it can appeal to WTO.

Whose cheese has Chinese shoes moved?

In January 2006, the European Commission refused to recognize the "market economy status" of 13 Chinese shoemaking enterprises, making the Chinese shoe industry in a very unfavorable position in anti-dumping cases.

In February 23rd, the European Commission issued an anti-dumping investigation result, which concluded that the Chinese footwear industry was in disguised form of government subsidies, dumping at the price below the cost of the EU market.

Subsequently, the EU Member States decided in March 16th to impose anti-dumping duties on Chinese footwear products from April 7, 2006, and gradually increased the anti-dumping duty from 4.8% to 19.4% within 6 months.

Over the past 4 years, the EU has been increasingly opposed to levying anti-dumping duties on Chinese shoes.

Lord Mandelson, the British business secretary, has warned that extending the anti-dumping duties on footwear products in China and Vietnam may damage the long-term business relationship between Europe and the two countries.

He expressed concern that one of the consequences of the economic crisis was the decline in the enthusiasm of the European Union for free trade.

"In the EU Member States, a more introverted attitude is growing, that is," let us keep what we have now. "

Mandelson said.

Guo Weiwen said that in fact, the industry within the European Union was dissatisfied with the ruling, "because such a ruling does not help any domestic industry. In fact, many large brands in Europe need to be placed in Asia, which is the result of the division of globalization and there is no dumping."

Voice of the industry: fight with the European Commission

According to statistics, after the EU took anti-dumping measures on Chinese shoes, the total amount of shoes imported from the EU dropped by 15%.

Data show that in the past 3 years, the sales volume of China's shoe exports dropped by 15%, and its revenue dropped from 2 billion 80 million euros to 1 billion 780 million euros during the peak period.

Wu Zhenchang, the chairman of the European Union's anti dumping alliance with Chinese footwear products, and chairman of Guangzhou Chuangxin shoes industry, said that the EU appeals WTO is mainly guided by the Chinese government, and the enterprises will do their best to help them. In the near future, they have been communicating with the Ministry of commerce, mainly with lawyers' suggestions to provide the government with detailed materials to prove that Chinese shoe enterprises do not have dumping on the European market.

Wang Hailong, a spokesman for AOKANG, said in an interview with our reporter that he would work with the European Union clients and lawyers to cooperate with the Chinese government in carrying out the lawsuit.

Since the EU imposed 16.5% anti-dumping duty on China, although the EU customers have been paying anti-dumping duties, the cost increase has seriously affected AOKANG's expansion in the EU market. The average annual growth rate was doubled every year before 2006, and it was almost impossible to develop new customers after taxes.

China's shoe trade attorney, Pu Ling, believes that the EU's anti-dumping measures will be extended for another 15 months with obvious political tendencies. It does not explain the significance of extending the anti-dumping duties, nor does it respond to the legal response made by Chinese shoe companies to the EU shoe industry's "non-destructive" and "no causal relationship" defense. These are questionable.

The latest statistics from China Leather Industry Association show that the previous anti-dumping duty resulted in a 20% reduction in the output of Chinese leather shoes exported to Europe.

About 40 million pairs of shoes were exported to the EU, which caused about twenty thousand workers to lose their jobs.

The footwear industry in the United States was very unhappy with the EU's continued efforts in December last year to identify the dumping of EU footwear and impose high tariffs.

China's attorney general Pu Ling Chen, who is defending the EU's anti-dumping measures, said that we finally decided to propose a request for negotiation under the WTO dispute settlement mechanism to WTO. It is a helpless thing to do. "The domestic industry has responded fiercely to the final decision of the European Commission in December last year to extend anti-dumping measures, and we must fight the end with the European Commission."

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Depreciation of the euro and damage to China's shoes exports

The euro, once a spectacular euro, is now the biggest dilemma for Chinese exporters.

"Recently, orders for settlement in euros have almost all suffered losses."

The head of a textile and garment export enterprise in Nanjing, Jiangsu, told reporters directly about the impact of the continued depreciation of the euro.

"The profit of textile and garment export is only a few points. The euro has depreciated more than ten points recently, which means that our cost has increased so much that it will definitely affect the purchasing confidence of the buyers."

Experts believe that the impact of the rapid devaluation of the euro will be relatively lagging, and the growth of China's exports to Europe will slow down in the future.

The head of the above textile export company said that although the proportion of orders settled in euros is not large in the overall business of the company, however, due to the EU's economic situation is not optimistic, the European business department has warned that the export business in Europe this year is likely to suffer losses.

"At present, we hope that the RMB exchange rate will remain stable, which is the only way to offset the impact of the depreciation of the euro."

Since the beginning of this year, the euro has been declining in a weak position. So far, the total appreciation of RMB has reached 14.5%, which makes our exporters in Europe have to face the general cost increase.

Huo Jianguo, President of the international trade and Economic Cooperation Research Institute of Ministry of Commerce, analyzed that the depreciation of the euro was relatively slow. However, in the less than a month from the end of April to the middle of May, the depreciation rate increased rapidly, almost equivalent to the direct control effect of the policy. Therefore, China's exports to Europe, such as Electromechanical, textile and other products, will feel obvious impact later.

Huo Jianguo said that the growth rate of China's exports to Europe is still maintained at 25%. However, because the impact of the rapid depreciation of the euro may be relatively lagging behind, in May, the export growth rate of Europe has dropped. In June, the growth rate of exports to Europe will be more obvious, and the next step may be a further decline of 6-7%.

"At present, the United States has begun to worry about the trend of the euro, and China's exports will also be greatly affected. It can be said that stabilizing the euro is the top priority at present."

Huo Jianguo emphasized.

Li Haijun, head of Wenzhou AOKANG footwear import and export business, points out that the weakness of the euro reflects the current economic situation in Europe and the people's spending power.

Because the main exchange rate risk is borne by buyers, it is very likely that they will not dare to take big orders and long bills, but turn down small bills and short lists, which will shrink the volume of China's exports.

He also predicted that in the second half of the year, the company's export situation to Europe was not optimistic, and exports to Europe would decline this year.

According to Reuters sources, the EU's Executive Committee's recent estimates show that the 16 countries in the euro zone fell to 17.5 in May, falling back to the lowest level in 7 months, while the wider EU 27 countries fell from negative 12.3 in April to negative 14.7.

The decline in consumer spending has now become a weakness in the euro area. If the euro continues to depreciate, China's exports to Europe will be hit hard.