DUTY ON IMPORTS OF CERTAIN FOOTWEAR WITH
LEATHER UPPERS (12512/06)
Letter from the Chairman to Rt Hon Ian
McCartney MP, Minister for Trade Investment and Foreign Affairs,
Department of Trade and Industry/Foreign and Commonwealth Office
Thank you for your Explanatory Memorandum 12512/06
dated 20 February which was considered by Sub-Committee A on 13
March 2007. As you will be aware, the provisions referred to in
this document came into force on 7 October 2006 and were subject
to an override of the scrutiny reserve. The Sub-Committee expressed
their regret at this and was pleased to hear that you have put
into practice departmental improvements to ensure that these delays
do not occur again.
The Sub-Committee would be grateful if you could
provide an update on this particular case. They noted that the
UK almost succeeded in building up a majority against the proposal
and that the Commission agreed to shorten the duration of the
duties from five years to two years. We are now one quarter of
the way through this two year period and the Sub Committee would
be interested in hearing of the Government's assessment of the
impact of these duties on British manufacturers—both those
who have outsourced production to China and those still producing
in the UK—and on the prices of footwear with uppers of leather
in UK shops.
13 March 2007
Letter from Rt Hon Ian McCartney MP to
the Chairman
Thank you for your letter of 13 March seeking
further information about the effects of the imposition of ad
valorem anti-dumping duties on imports of footwear with uppers
of leather originating in China and Vietnam.
It is not possible to precisely isolate the
influence of anti-dumping measures on leather footwear prices,
because of the range of factors affecting prices at any one time.
However, assuming the full effects of the measures were passed
on to consumers, they could lead to one-off increases in prices
of the footwear covered by the measures of between 1.5% and 4.5%.
The changing pattern of trade over the latter part of 2006 suggests
that retailers and importers are making efforts to avoid this
by sourcing from other countries. This is borne out by EUROSTAT
figures.
You asked about the impact of the anti-dumping
duties on British manufacturers. There are a few producers of
footwear with uppers of leather in the UK. These manufacturers
wrote to me in early 2006 urging me to support the European Commission
proposal to impose anti-dumping duties. I have not heard from
them since. The large manufacturers such as Clarks, who outsourced
their production to various countries in Asia, are opposed to
the duties. Since the imposition of the duties, there has been
a trend to source from other countries in Asia, apart from China
and Vietnam. EUROSTAT statistics indicate that imports into the
European Community from Malaysia and Cambodia in particular rose
by 660% and 240% respectively in the period of July to November
2006 over the same period in 2005. Imports from Macao increased
even more rapidly by 1,700% in the period April to November 2006
over the same period in 2005. The European Commission is considering
taking anti-circumvention action against Macao, subject to gathering
evidence that Chinese footwear is being imported into the EU with
a false declaration of origin.
On the other hand, imports from China and Vietnam
have dropped by 40% and 52% respectively since the imposition
of the definitive duties. This is based on a comparison of imports
for October and November 2006 with imports for the same two months
in 2005. This is in line with the prediction made by UK retailers
before the duties were imposed, when it was argued that the duties
would not assist EU producers but would cause companies to source
from other third countries.
23 April 2007
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