Political And Economic Analysis Of EU Anti-Dumping On Chinese Leather Shoes

The EU's economic and trade ties with China are very close and our country's largest trading partner.

In 2007, bilateral trade between China and the EU reached US $356 billion 150 million.

At the same time, the EU, the world's third largest anti-dumping entity after India and the United States, has frequently used anti-dumping measures to restrict imports of Chinese products.

In recent years, the number of anti-dumping investigations by the European Union against China has accounted for a high proportion of the total number of anti-dumping investigations by the European Union. For example, the number of anti-dumping investigations against China in 2007 accounted for half of all the anti-dumping investigations. In September 2007 February 2008, the EU launched 9 new anti-dumping investigations involving Chinese products.

And the amount of anti-dumping cases involving the European Union is huge and has a wide impact.

For example, in 2006, the EU's anti-dumping case involving Chinese leather shoes amounted to US $730 million, affecting about 1200 Chinese shoemaking enterprises.

Therefore, the EU's anti-dumping against China is still very grim.

The EU's political and economic analysis of anti-dumping against China's leather shoes (1) the game between the European Commission and its Member States, the European Commission, as the executive body of the anti-dumping policy, largely dominates the process of anti-dumping.

However, the decision to decide whether to levy a formal anti-dumping duty falls on the hands of the member states. Therefore, there is a fierce competition between the European Commission and the member states in the process of anti-dumping.

In the European Union's anti-dumping on Chinese leather shoes, the European Commission first listened to the recommendations of Member States through the anti-dumping Advisory Committee, amended the proposal and finally passed it.

However, when the two sets of proposals put forward were rejected by Member States, the European Commission, which considered it necessary to levy anti-dumping duties, bypassed the anti dumping Advisory Committee and submitted the proposal to the Council of the European Union for voting.

On the surface, the game between the European Commission and its Member States is evenly matched, but this is not the case.

The European Court's ruling in 1998 was the main reason for the European Commission's advantage in the game.

In July 1996, the European Union Cotton Textile Joint Commission (Eurocotton) submitted an application to the European Commission to impose anti-dumping duties on all types of cotton bedding products produced in India, Pakistan and Egypt.

Similar to the anti-dumping against leather shoes, EU member states are also divided into two camps: "support" and "opposition".

France, Italy, Spain and Portugal, as the main producers of cotton fabrics, have expressed their support for levying anti-dumping duties, while other EU Member States as importing countries oppose anti-dumping measures.

As a result, most member states voted against the European Commission when it completed the investigation procedure and submitted a vote to the European Council.

The EU Cotton Textile Joint Commission then put forward an anti-dumping application, aiming at only unbleached cotton fabrics.

However, the new anti-dumping proposal was rejected by the European Council.

So the European Union Joint Commission on cotton products filed a lawsuit with the European Court of justice on the resolution of the Council of the European Union.

Finally, the European Court adopted the EU Cotton Textile Joint Commission's opinion that the EU Council did not produce enough evidence to oppose the European Commission's proposal.

That is to say, this case establishes a principle, and the Council of the European Union needs to provide strong evidence for its decisions.

This makes it difficult for the Council of the European Union to overturn the European Commission's proposal.

This is also true of the anti-dumping duties on leather shoes in China.

The European Commission warned members in August 30, 2006's news bulletin that if they voted against the bill, they had to come up with a solid basis. Otherwise, the European Court of justice could decide on the grounds that the vote was invalid.

The practice of the European Commission has put considerable pressure on Member States against its proposal.

Finally, in the voting of the Council of the European Union, although only 9 countries voted in favour of the 25 Member States, 4 countries abstained, and the majority of the anti-dumping proposals were passed, while the Chinese footwear enterprises will face 16.5% anti-dumping tariff restrictions in the next two years.

(two) the game between EU Member States is different from EU. Due to different economic structure, its member states have different attitudes towards EU's anti dumping against China, and can generally divide two groups: "free trade" and "protectionism".

Scholars Evenett and Vermulst (2005) studied the EU anti-dumping policy.

They divided France, Italy, Greece, Spain and Portugal into 5 groups: "inclined to impose anti-dumping duties" (protectionism); Germany, Sweden, Denmark, Luxemburg, Holland and Finland were classified as "inclined to collect no less or less anti-dumping duty" (free trade) group.

Other countries such as Belgium, Britain, Ireland and Austria belong to the middle.

In the process of anti dumping against China, there are also great differences among EU Member States. There are fierce disputes between free trade groups and protected trade blocs, but in the end, protectionist forces often gain the upper hand.

Take the EU's anti-dumping on Chinese leather shoes in 2006 as an example. Italy, France, Portugal and Spain, which are directly threatened by China's low shoe products, strongly advocate the protection of the European footwear industry. They form a "protectionist" group and lobby the European Commission to take anti-dumping measures against Chinese leather shoes.

Some European Union members, such as Sweden, Britain, Denmark and Holland, have basically shifted their domestic footwear production, and the wholesale and retail sales of footwear products are very developed. Therefore, they strongly oppose the Levy of anti-dumping duties and advocate free trade. Because of the earlier restructuring of footwear in Germany, footwear production has entered the upper reaches of the value chain, and has not been panic about Chinese products occupying the low and middle end market, and therefore does not advocate restrictions on Chinese leather shoes.

These countries formed a "free trade" group and fiercely opposed the anti dumping measures of the European Commission.

But in the end, the EU passed a two-year anti-dumping duty proposal on leather shoes in China for a two-year tax rate of 16.5% in October 4, 2006.

In March 2008, the European Union's air dumping cases against China, which were just announced in March 2008, were balanced by the EU Member States' support and opposition. Mandelson was inclined to oppose anti-dumping duties, but finally succumbed to the pressure of the internal protectionist forces of the European Commission.

(three) the EU's private sector game against Chinese leather shoes is not only from the government level of the Member States, but also the main interest groups formed by trade associations.

In the EU anti-dumping case against China's leather shoes, from the second half of 2004, the EU footwear manufacturers association and Italy Footwear Manufacturers Association began to restrict the import of footwear in China.

In January 2005, the Italy Footwear Manufacturers Association published a report in most newspapers in Italy, calling on consumers in Italy to boycott imported leather shoes from China.

In June 2005, under the leadership of the European Footwear Manufacturers Association, the footwear manufacturers association of Italy, Spain, Portugal, Poland, Greece and other countries held a parade in Brussels, demanding that the European Commission take trade restrictive measures on China's footwear products.

At that time, over 450 European footwear manufacturers handed over the keys to the European Commission, which showed that the growth of imports had seriously threatened their survival.

In the textile trade friction between China and Europe, the role of European Textile Association (Euratex) is also very active.

In the 10 China EU textile agreement signed in June 2005 (EU – China textile agreement), the European Union imposed restrictions on imports of ten categories of textile and clothing products from China. The import restrictions on eight categories of products were designated according to the European Textile Association's opinions.

Conclusion under the impetus of protectionist interest groups, the European Union launched anti-dumping investigations against cheap labor intensive products such as textiles, clothing and footwear products in China.

The revision of EU anti-dumping rules makes it difficult for Chinese enterprises to gain a favorable position in anti-dumping.

Take the footwear industry, which is under the impact of EU anti-dumping, for example, according to the statistics of the Asian Footwear Association, more than 1000 of the more than 5000 shoe making enterprises in Guangdong, which are mainly engaged in processing trade, have been closed down.

About 25% of other enterprises left Guangdong to set up factories in Southeast Asia, such as Vietnam, India, Burma and other countries. About 50% of them went to factories in mainland China, such as Hunan, Jiangxi, Guangxi and Henan.

And the Jiangsu and Zhejiang shoe making enterprises, which focus on brand advantage, such as AOKANG and red dragonfly, can better cope with the current heavy pressure.

In October 2008, the EU anti-dumping measures are about to expire. At present, Italy has begun actively lobbying to extend the implementation period of anti-dumping measures.

Chinese enterprises will face new challenges.

Through the European Union's anti-dumping, the experience of shoemaking enterprises' life and death has shown that Chinese enterprises should have the space to survive and develop under the heavy trade barriers brought by protectionist forces. In addition to actively participating in anti-dumping investigations, they must also pay attention to product brand awareness, technology content and marketing strategy, and step out of the development mode of relying on low cost labor force to make profits, so as to truly break through the EU's anti-dumping barriers and create a broader space for development.