On the evening of October 12, there must have been a full moon over an alliance of Chinese shoemakers that was meeting. Howling about the European Union week – earlier vote to slap anti-dumping duties on shoes imported from China and Viet Nam, the voices turned from snarl to bite: They would sue.
“This news hit us badly and some companies whose businesses are mainly from Europe have been closed,” said Wu Zhenchang, Chairman of Guangdong Chuangxin
Shoe Manufacturing Co.
While suing the EU would be no easy task, the shoemakers are committed to this idea: You won’t walk all over us so easily, at least not without losing your cheap shoes.
Duty bound
Wu’s vacation ended just in time to manage a major crisis. On the first working day after the week-long National Day holiday, Wu returned to work answering call upon call. It was the day after the EU began to impose a 16.5 percent duty on leather shoes from China.
“Once we are levied anti-dumping duties, our production costs will increase and the clients may shift to factories in other countries or regions,” Wu said. Already, provisional duties had been in place since April 7, levying anti-dumping
duties for six months on Chinese shoes. They gradually rose from 4.8 percent to 19.4 percent. In the meantime, foreign purchasers began shifting their orders from China to Thailand and Indonesia.
“Our original costs have been a little bit higher than theirs, and now together with extra duties, we will lose all our advantages,” Wu said. When the duties expired October 6, the EU decided to levy two – year-long duties beginning the next day.
Critical mass decision
Enough was enough, and on October 12, Chinese shoemakers decided to make that clear. In their special session, held along with the China Alliance in Response to EU Anti-Dumping of Chinese Footwear, they solved to sue EU courts in the name of companies instead of his alliance.
In accordance with EU laws, alliances or chambers of commerce have no right to bring a suit to courts, although companies may do so. Legal fees would be very high°(TM) around 200, 00 eu ros°(TM) if individual companies were to sue sep a rarely. Hence the alliance called on the 150 affected Chinese shoemakers to jointly sue the EU. As a result, every company would need to pay less han 10,000 euros. Meanwhile, EU courts could still make different company – specific decisions, tailoring duty decisions as if individual suits were filed, according to Wu. To achieve customized verdicts would in some sense be a win because imposing the 16.5 percent across the board duty upon Chinese shoemakers could be labeled unfairly arbitrary itself. That’s because the EU did not carefully examine investigation materials as certained on many companies, said Wu. Even Golden Step Industrial Co. Ltd., the only company that received special treatment under the new duty system, will also join the suit since the EU never sufficiently explained the reasons to hit it with a lower-but – s till – significant 9.7 percent duty.