Shoe firms win fight over EU anti-dumping duties
A landmark ruling by the European Court of Justice is expected to result in lower anti-dumping duties on Chinese goods exported to the EU.
The judgment by the EU's top court meant that in future, Chinese goods heading to the EU would in general face lower anti-dumping duties, said Edmund Sim, a partner at international law firm Appleton Luff.
On Thursday, the court annulled anti-dumping duties the EU slapped on Hong Kong shoemakers Brosmann Footwear and Risen Footwear and Guangdong shoemakers Seasonable Footwear (Zhongshan) and Lung Pao Footwear (Guangzhou). They are among 400 to 500 Chinese and Vietnamese shoemakers which have been paying anti-dumping duties since 2006.
Most Chinese shoemakers have been paying duty of 16.5 per cent.
Since 2006, the Chinese and Vietnamese shoemakers had paid more than US$1 billion in such duties, said Arnoud Willems, a partner at US law firm Sidley Austin.
Willems, who represented the shoemakers, said the companies could expect to gain millions of dollars in tax refunds.
The court also ruled that any Chinese exporter requesting an individual assessment of an anti-dumping duty imposed on it is entitled to receive one. Individual assessments increase the likelihood of anti-dumping duties being lowered.
'This is an important development,' Willems said.
He said China, as the world's biggest exporter, was also the biggest victim of EU anti-dumping duties, with at least eight in 10 of such actions directed against its companies.
If the EU argued that it was unable to look into the appeals of all exporters because there were too many of them, it must take a representative sample of exporters and calculate the anti-dumping rates accordingly, said Sim, who has also helped some Chinese and Vietnamese shoemakers in anti-dumping cases.
The EU uses only one Chinese company to calculate the anti-dumping rate for all Chinese companies. This lead to higher duties than would be the case if the rate been based on several companies, Sim said.
The EU adopted this practice because it treated China as a non-market economy and assumed all companies were controlled by the state, Sim said. 'The Court of Justice says the EU cannot do it anymore. It increases the legal obligations of the EU.'
The judgment overturned an earlier ruling by the General Court of the EU.
It was the fourth time the European Court of Justice had overturned a lower-court ruling, Willems said.
According to Sim, EU courts are independent of the politics of China-EU relations. The judgment came on a day when Premier Wen Jiabao told German Chancellor Angela Merkel in Beijing that China was considering getting more deeply involved in tackling the EU's debt crisis.
The EU anti-dumping action against Chinese and Vietnamese shoemakers in 2006 was the result of political pressure by rivals from southern European nations including Italy and Spain, according to Sim. Many of these nations are now looking to China to help resolve their debt problems.
The duty the European Union had imposed on Chinese shoe manufacturers for dumping since 2006