The mininstry of commerce said the EU tariffs “damage the legitimate rights
and interests of Chinese enterprises”.

The move follows the EU’s decision in December to extend anti-dumping duties
against Chinese and Vietnamese footwear for 15 months. It comes at a time of
rising tension between China and its western trading partners – a situation
that has been exacerbated by the prolonged economic recession.

Anti-dumping
The anti-dumping duties amount to 16.5 per cent for Chinese imports and 10 per
cent for Vietnamese. They were originally rejected by EU member states in a
non-binding vote in November. But Germany, Austria and Malta later changed
their positions amid heavy lobbying by the Commission.

Many European retailers and global shoe brands, which source numerous products
from China, also opposed the opposed the move.

In what was seen as retaliation, China quickly slapped duties on imported
carbon-steel fasteners from Europe.

In its filing, China is requesting consultations with the EU to try to resolve
the matter. If the two sides cannot agree a settlement within 60 days, then
China would request a ruling from the WTO.

It is only the second time Beijing has taken the EU to the WTO’s formal
dispute resolution process and comes as Beijing is becoming more assertive
on the world stage on issues ranging from climate change to US arms sales to
Taiwan.

The row has emerged as a closely-watched test of the EU’s commitment to free
trade in the middle of an economic recession. It has pitted small shoemakers
in Italy and Spain against large retailers from the UK and elsewhere that
have increasingly outsourced production to Asia.

The EU first imposed the duties for two years in 2006 after a surge of
low-cost imports eroded the market share of domestic footwear manufacturers.
European market share has since stabilised.

Mandelson
Lord Mandelson, who imposed the original duties in his previous role as
European trade commissioner, lobbied heavily against their renewal. Lord
Mandelson, the UK business secretary, warned that such a move could damage
trade relations with China and Vietnam.

In a statement on Thursday, the European Footwear Alliance, whose hundreds of
members includes retailer Adidas and Clarks, said it shared China’s view
that the EU decision had been based on “a very questionable investigation
and a flawed analysis”.

“The extension of the footwear duties opens the door to retaliatory measures
on EU exports to China and puts paid to European leaders’ repeated pledges
to defend free trade,” the group added. “The EFA calls on the European
Commission to take immediate action to prevent relations between the EU and
China from degenerating further.”

Concerns over the potential for a trade war involving China and the West have
been growing in the aftermath of the financial crisis.

Beijing has refused to allow its currency to appreciate since the onset of the
crisis despite complaints from many of its trading partners that it is
pursuing a mercantilist policy that puts other countries at a disadvantage.

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