Business Alert - EU
Business Alert - EU |
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Member States' intervention is latest development in controversial footwear cases Readers of Business Alert-EU will certainly be interested in the state-of-play concerning the ongoing anti-dumping investigations against the Chinese mainland with regard to certain footwear products. To recap, there are two separate investigations: one concerning certain leather shoes, the other concerning certain safety shoes with a protective toecap (see, also, Business Alert-EU 23/2005). Both these investigations are at an advanced stage, with the Commission having verified the sampled companies on-spot in the Chinese mainland. The latest state of play in both cases is as follows. As concerns leather shoes, on 1 December 2005 the Commission revealed to the Anti-Dumping Advisory Committee its decision as concerns Market Economy Status (MES) with regard to Vietnamese companies (Vietnam being another country whose imports are subject to investigation). According to EU sources, it was revealed that none of the eight companies obtained MES. No decision was made with regard to companies in the Chinese mainland, but presentation of a proposal regarding MES is possible at the next AD Advisory Committee meeting of 15 December. As concerns safety shoes, it is also possible that the assessment on MES will be made at the same meeting of 15 December as a number of Chinese mainland companies are involved in both cases. Speculation over the two footwear cases is rife, given the magnitude of exporting producers and EU trade potentially affected. There are major interested parties among both producers and users within the Community. Household names such as Adidas and Puma are stakeholders in the outcome of the present proceedings. It is thus not surprising that there is a very strong lobby pro and contra the imposition of trade defence measures in the current proceedings. Most interestingly, the advent of the negative MES decision on Vietnamese companies has coincided with the timely intervention of the Netherlands, Sweden and Denmark. These three countries are planning a joint initiative to seek the termination of the anti-dumping proceedings. The success of the said initiative will depend on the persuasive capacity of these countries to bring other Member States on board. They will need to persuade a majority of Member States (requiring 13 out of 25 in all) if their objective is to be successful. In any event, Hong Kong traders with interests in the footwear industry ought to welcome the negative publicity drummed up by the three Member States. Even if the Member States fail in their objective to terminate the proceedings, the political pressure that they have exerted is likely to have a bearing in some shape or form on the eventual decision in both cases. This is particularly so as concerns the Chinese mainland which is the world's largest exporter of footwear with 4.3 billion pairs of shoes exported during 2003. The political pressure may lead to a more lenient stance being taken as concerns the MES claims of the sampled companies in the Chinese mainland and/or a more reasonable level of duty than may otherwise have been. Particularly interesting was the recent proposal to the AD Advisory Committee by the Commission to exclude sports shoes from the ambit of the leather shoes investigation. This would no doubt work to the benefit of a number of the large sports shoes manufacturers in the mainland. Although the discussion was inconclusive, the above-mentioned initiative by the Member States may entice the Commission to act reasonably on the product scope in order to push the investigation through to its conclusion. Interesting times thus lie ahead for the development of these important anti-dumping proceedings, though it is possible that a clearer picture of the Commission's stance as concerns the MES of companies in the Chinese mainland will be revealed before Christmas. In any event, Business Alert-EU will inevitably keep its readers updated in a timely manner. | ||||||||||||||||||||||||||||||||||
