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WTO sides with China in EU anti-dumping dispute

By Luo Lan (People's Daily Overseas Edition)

08:17, November 03, 2011

Edited and Translated by People's Daily Online

The Dispute Settlement Body of the World Trade Organization decided on Oct. 28 that the anti-dumping measures adopted by the European Union against leather shoes made in China have violated the rules of the World Trade Organization.

Long-term unfair treatment

Chinese leather shoes had long become a pain for some E.U. member states, particularly major footwear production countries such as Italy and Spain. The European Union imposed two-year anti-dumping duties of 16.5 percent on Chinese leather shoes on Oct. 5, 2006, which affected more than 1,000 Chinese enterprises.

The European Union initiated a sunset review on October 2008 prior to the expiration of the penalty duties and approved a 15-month extension of the anti-dumping duties on Dec. 22, 2009.

Chinese enterprises filed a complaint against the European Union to the World Trade Organization in February 2010 after negotiations broke down. The World Trade Organization set up an expert panel in May to investigate the case and concluded that related regulations of the European Union's Basic Anti-Dumping Regulation are against the rules of international trade and the E.U. anti-dumping arm used incorrect articles during anti-dumping investigations.

Mei Xinyu, a senior researcher from the Research Institute under the Ministry of Commerce, said that this marks a significant progress that China is able to correct irrational trade measures of some trade partners through the channel of the World Trade Organization one decade after its accession into the body.

China's growing influence in Europe

Chinese shoemakers won the victory after more than four years of suffering and huge losses. According to statistics from China Leather Industry Association, the anti-dumping duties led to a 20 percent reduction in demand, which is equivalent to 40 million pairs, in China's exports of leather shoes to Europe and cost nearly 20,000 Chinese workers their jobs.

Jiang Xianling, deputy dean of the School of International Trade and Economics under the University of International Business and Economics, said that several domestic and international factors are crucial to the victory. Of the factors, two domestic factors are the establishment of Chinese shoemakers' unions and China's growing influence in Europe. Internationally speaking, the European debt crisis has made Europeans aware that the development model of imposing high duties on foreign products is defective. They have noticed that over the past two years since the global financial crisis, China has continued to shoulder its international responsibility as a world power, and made remarkable achievements in carrying out market-oriented economic reforms. Given China's important role in pulling Europe out of the economic crisis, Europeans have started to take the feelings of Chinese into consideration.

Harsh international trade environment

Industry insiders noted that China has not gained E.U. recognition of market economy status, and should not be satisfied with temporary success. Chinese exports will continue to face harsh international trade environment. Wang Zhentao, vice president of China Leather Industry Association and chairman of Aokang Group, said that although the abolishment of the anti-dumping taxes has reduced the burden on Chinese shoemakers, they should not become blindly optimistic. Instead, they should take the future of the Chinese footwear industry into consideration, enhance self-reliance, increase spending on research and development, add value to their brands, and diversify their products and services.

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Sam Teng at 2011-11-04175.136.49.*
Kudos to the World Trade Organization. The EU and US should know that they cannot implement anti-dumping measures just to protect their own interests. They should uphold the freedom of trade and respect the competitive advantage of other countries. You cannot simply impose unfair rulings against others just because you do not have competitive advantage. This is protectionism and against the anti-trust rules.

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