Updated: 2006-03-15 06:12
Chinese labour safety shoes are likely to be free from European Union (EU) anti-dumping tariffs.

Li Fayin, a lawyer with the Beijing-based Allbright Law Office, said he had been told by sources close to the European Commission that the EU would not impose tariffs on Chinese labour safety shoe makers in primary rulings (expected next month), because it has found no evidence that China's exports have injured the bloc's shoemaking industry.

Investigations into whether labour safety shoes and leather shoes were dumped into Europe have been completed. But the two sides are still talking about market economy treatment in the leather shoe case.

Li represented Chinese footwear makers in the dumping charge initiated by the European economic bloc last June against Chinese labour safety shoes.

The lawyer said that if no more evidence was found before the final ruling, shoemakers could breathe a sigh of relief.

Yesterday EU trade officials were still in talks with China's Ministry of Commerce. Discussions were focusing on the market economy treatment of Chinese shoemakers in the EU claim that Chinese leather shoes were dumped in the bloc, officials with the ministry revealed. However, they declined to disclose how the talks were progressing.

Late last year the European Commission declined to give market economy treatment to those Chinese shoe firms that responded to dumping charges.

If the EU does impose a punitive tariff on Chinese leather shoes, having market economy treatment will at least help Chinese shoemakers to gain a lower duty rate.

In the last few weeks officials with the Chinese commerce ministry urged the European Commission to reconsider market economy treatment for Chinese leather shoe factories, saying the EU's decision not to give them market economy treatment violated World Trade Organization rules.

According to the ministry, 98 per cent of enterprises in China's shoe making sector are privately run firms or joint ventures and the State intervention claimed by the EU does not exist.

Before the negotiations in Beijing, the EU delegation led by Fritz-Harald Wenig, who is in charge of trade relief in the European Commission met Chinese enterprises and the shoe and leather industry association of Wenzhou.

Wenig was quoted by Xinhua News Agency as saying that "it is our first face-to-face contact with Chinese enterprises. Both sides should try their best to exchange views. And the venue to do this is not necessarily confined to the negotiation tables in Beijing."

Last month EU Trade Commissioner Peter Mandelson claimed that Chinese and Vietnamese footwear exporters conducted "State-supported dumping" in the EU market and caused serious injury to the European shoemaking industry.

He proposed a six-month phasing-in of anti-dumping duties of up to 19.4 per cent, by October, on Chinese leather shoes.

The EU trade chief said in European media that his proposal did not target Asia's labour advantage but "unfair competition."

He said the phased-in duties would ensure that retailers with goods in transit are not suddenly faced with unexpected costs at borders.

"It means importers can plan ahead over the next six months with the maximum of transparency and predictability. It nevertheless means, that after six months full duty will be in place and the damaging effects of dumping will be counteracted."

Mandelson's proposals have been discussed at a meeting of a committee of the 25 member states but the outcome is not known.