China Wants WTO To Probe EU Shoe Duties

EU and China are battling over an EU decision to extend trade charges on Chinese and Vietnamese leather shoes by 15 months to protect European shoemakers.

GENEVA (AP) -- China and the European Union will square off next week when Beijing asks the World Trade Organization to launch a formal investigation of EU charges on Chinese shoes.

A WTO agenda released also includes two unfair trade cases against the United States, with Vietnam alleging illegal U.S. import barriers for shrimp and South Korea complaining about American charges on foreign steel products. Separately, Indonesia launched a new dispute Monday over the United States' ban on clove-flavored tobacco products.

The most sensitive topic at the WTO's April 20 meeting pits Brussels and Beijing against each other over an EU decision in December to extend trade charges on Chinese and Vietnamese leather shoes by 15 months to protect European shoemakers.

China says the antidumping duties are protectionist and damaging to free trade, and has received backing from European importers and retailers who say the charges cost shoppers millions of euros (dollars) each year.

The European Union introduced the trade charges in October 2006, claiming European producers were being harmed because Chinese and Vietnamese rivals were illegally selling shoes below cost in Europe. It says the fees are still relevant because China is "dumping" the shoes at artificially low prices and harming a European industry that employs 260,000 people.

Countries breaking international trade rules can face WTO-authorized sanctions, usually through higher tariffs on their own exports. But trade cases generally take years to resolve and often avoid such retaliatory measures.

The EU can delay China's request for the establishment of a WTO investigative panel only once, meaning the probe is likely to be established either next week or in May.

Some shop owners and some shoe brands say they are the real victims of the EU's charges because they are forced to pay more for the vast number of shoes now made in China.

The European Footwear Alliance, which represents Timberland, Ecco, Hush Puppies and Adidas, estimates that EU consumers and businesses could lose hundreds of millions of euros through 2011. Meanwhile, the charges could generate euro1 billion in tariffs, without helping Europe recoup lost manufacturing jobs because shoes from China and Vietnam are now being replaced by imports from other emerging countries.

The charges add between 9.7 percent and 16.5 percent to the import price of Chinese shoes and 10 percent to Vietnamese shoes. The EU says that equates to price jumps less than euro1.50 for shoes that sell for euro50, because the product is being imported at a price around euro9.

The Korean and Vietnamese cases against the United States deal with how Washington calculates import fees for foreign goods it suspects are being similarly sold at unreasonably low prices. The U.S. has lost a string of cases on the subject in recent years, but has refused to reform its practices.

Indonesia, meanwhile, has initiated a 60-day consultation period with the United States over a September ban by the U.S. Food and Drug Administration on manufacturing, importing, marketing and distributing candy-, fruit- and clove-flavored cigarettes.

Clove cigarettes originated in the 1880s in Indonesia and are a staple of the country's smoking culture -- so much so that companies like Philip Morris International Inc. have created their own blends bearing the famous Marlboro name in Indonesia and India.

Before the ban, Indonesia said it exported more than $500 million worth of the product each year, with about a fifth of the shipments going to the U.S. The industry employs about 11 million Indonesian workers.

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