The EU states agreed on Wednesday to impose tariffs on Chinese and Vietnamese shoe imports for two years" to prevent cheap imports from flooding local markets."

A shopkeeper waits for customers at a shoe store in Beijing August 31, 2006. The EU states agreed on Wednesday to impose tariffs on Chinese and Vietnamese shoe imports for two years." [Reuters]

But Ministry of Commerce spokesman Chong Quan said the filing, the investigation and the ruling of the case has legal defects that run contrary to World Trade Organization rules and the EU's own anti-dumping laws.

"The latest EU anti-dumping measures against Chinese shoe imports lack legal and factual basis and will damage the legitimate rights of Chinese shoe enterprises," Chong said.

"Chinese enterprises and the shoe-making industry are dissatisfied with the EU decision."

Chong added that China would monitor and assess the situation, and reserve the right to take responsive measures.

From tomorrow, the EU will levy an extra charge of 16.5 per cent for shoes from China and 10 per cent from Viet Nam. Eleven per cent of the shoes sold in Europe, including children's footwear, are from those two countries.

The European Commission said the ruling could add 1.40 euros (US$1.80) to the price of Chinese shoes, whose average retail price is 35 euros (US$44.80), if importers and retailers pass the increase on to customers.

European business and consumer groups criticized the EU's decision, saying it will harm both consumers and business.

"This is a sad day for Europe," said a joint statement from EuroCommerce and the European Consumers' Organization, two organizations that represent European retail, wholesale and international trade sectors and consumers.

"The decision to impose anti-dumping duties on Chinese and Vietnamese shoes is anti-consumer, anti-trade and anti-competitive.

"Despite best efforts and an extremely competitive retail market in the EU, no company can digest the new duties without increasing prices in the shops."

It added that the new anti-dumping duties shelter uncompetitive producers, do not create one job, make consumers poorer and hurt companies. They also worsen the EU-China trade relationship, it said.

"Europe's future is in innovative value-added products, not in old-fashioned protectionism," the statement said.

The Foreign Trade Association (FTA), which has trading companies as members in nearly all European countries, also attacked the decision.

"This is a major disappointment for European retailers and a serious blow to European consumers," FTA Secretary-General Jan Eggert said in a release.

"The measures that will now be imposed will not benefit the European manufacturing industry but could very likely lead to job losses to retailers and importers and an increase in consumer prices."

The decision was approved by a slight margin at a meeting of permanent representatives of the 25 EU nations in Brussels. Nine countries voted in favour and 12 were against, with four countries abstaining. Under EU law, abstentions in such cases count as in favour of the proposal as they do not oppose it.

The FTA expressed reservations over the way the decision was made, calling the voting system "a peculiarity."

"This type of wheeling and dealing involved in implementing European Commission legislation such as anti-dumping duties must stop," Eggert said.

"This decision will affect millions of ordinary consumers across the European Union. The way in which it has been taken is an illustration of just how necessary the current review of the Anti-Dumping Regulation is, and I hope, for the benefit of those consumers, that the Commission considers our views seriously."

The deal was approved after France revised a European Commission proposal that would have left the tariff rates in place for five years.

Half of the 2.5 billion pairs of shoes sold in the EU last year came from China. The extra charges affect about 174 million pairs.