The European Union is offering a possible reprieve for Chinese and Vietnamese shoemakers due to be stung by anti-dumping duties of up to 20 per cent. The trade defence director of the European Commission, Fritz-Harald Wenig, is scheduled to fly to Beijing for talks with Chinese officials next month and meet Chinese shoe manufacturers in Wenzhou city, Zhejiang province on March 9, said an industry source. '[EU Trade Commissioner Peter] Mandelson is determined to start immediate negotiations with Chinese and Vietnamese factories to encourage them to reform production. We're willing to revise the duties anytime. We're very mature about this,' an EU official told the South China Morning Post. Late last year, the EU found 'compelling evidence' that all Chinese and Vietnamese factories making shoes with leather uppers, from sports shoes to fashion boots, were receiving government support, said the EU official. This made it likely the factories would be subjected to anti-dumping duties. But if the factories could demonstrate to the EU that they had reformed their operations and that they did not receive state support, the EU would revise the duties, said the official. In anti-dumping investigations, manufacturers that successfully demonstrate they operate according to market conditions get low or zero-rated anti-dumping duties. On March 9, the EU is scheduled to decide whether to impose anti-dumping duties on Chinese and Vietnamese shoes with effect from April 7. The duty would be increased in four stages over six months, to a final rate of slightly less than 20 per cent that would last at least five years. To lobby against EU anti-dumping duties, a coalition of more than 100 China-based shoe manufacturers was formed earlier this month, said Derek Lee, vice general manager of Pegasus International Holdings, a Hong Kong-listed shoe maker. The coalition includes Pegasus and Yue Yuen Industrial (Holdings), a Hong Kong-listed firm and the world's largest contract manufacturer of sports shoes. Yue Yuen would strive to demonstrate it was operating in a market-driven manner and hence should not be subject to anti-dumping duties, said its executive director Steve Li I-nan. 'We firmly believe we are not guilty of dumping. If a duty of around 20 per cent was imposed, it would be very difficult for our China factories to bear because of the tight profit margins,' he said. EU anti-dumping duties would affect US$315 million of Yue Yuen's shoes, or 10 per cent of its annual revenue, according to Mr Li. Although Yue Yuen can transfer production to its Indonesian factory, it would be difficult, given the huge investment and employment in its China factories, said Mr Li. Sales of mass-market leather shoes made in China and Vietnam, - about half the shoes involved in the anti-dumping case - would be seriously hurt by a 20 per cent anti-dumping duty, said Douglas Sheridan, owner of BKMS, a trading firm. 'The mass volume shoe industry will be in a very difficult situation. EU retailers buying inexpensive shoes from China and Vietnam will adjust their profits or lose sales,' said Mr Sheridan.