EU Moves to Abolish Tax

EU Moves to Abolish Tax
Bob Goldman

LOS ANGELES — Footwear players last week applauded a European Union trade panel’s rejection of a proposal to extend dumping duties on Asian-made shoes.

Unless EU ministers step in to overrule the panel’s decision — a move seen as highly unlikely by many — import tariffs on shoes will expire on Jan. 3.

“This is a positive sign that countries in the EU aren’t scratching the itch to throw up protectionist measures, which is often the case during tough economic times,” said Matt Priest, president of the Footwear Distributors and Retailers of America.

The European Footwear Alliance issued a statement welcoming last week’s vote and its implications for improving the footwear business across Europe. “In rejecting the proposal prepared by the commission’s services, a majority of member states have sent a clear signal that they understand the economic realities of the modern European footwear sector and do not want to extend the antidumping duties in these times of economic crisis,” said the statement.

Vendors too said the end of duties is a triumph for both manufacturers producing in China and European consumers.

“Anytime you end these taxes, the consumer can get more. This is really going to help Europe,” said Chinese Laundry CEO Bob Goldman. “The reality is that there are big opportunities in Europe now. Business was really bad there [for a while] and a lot of retailers had closed and a lot of factories had closed, so a lot of the pressure [to impose duties] isn’t there now, and that made this possible.”

Still, the EU executive commission, which supports the tariffs, said it intends to fight on and lobby ministers to extend the duties by 15 months when the group meets in December.

The EU first slapped a two-year duty on shoes manufactured in China and Vietnam in 2006. It added 16.5 percent to leather shoes made in China and 10 percent to Vietnamese-made shoes sold in Europe. The move came after European shoe manufacturers accused the Asian countries of manipulating their currencies to artificially lower production costs, which created an unfair playing field on which to compete.

While the rescinding of duties will undoubtedly make Chinese- and Vietnamese-made shoes cheaper in Europe, some said that would not necessarily translate into sales gains for manufacturers.

SportsOneSource analyst Matt Powell said he does not expect the repeal of duties to spur extra sales.

“I don’t think you’ll see this groundswell of people going out to buy an extra pair just because these duties are gone,” he said. “The regulations and duties were an aggravation more than anything else.”

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s