with Europe, which Beijing wishes to enhance, and from which it benefits enormously.
Of course, this may mean that when it comes to trade disputes, certain sectors in China may lose out. But Beijing has generally adopted the view that even if the anti-dumping action on shoes will negatively impact an industry that generates significant exports and employs tens of thousands of workers, this is only a small fraction of total Chinese exports to Europe There are also wider diplomatic considerations, as Beijing considers is relationship with Europe to be of vital strategic importance, and one that it wishes to cultivate carefully. For Vietnam, without the same broad base of export industries, the measures may be harder to accept, but Vietnam's options are also more limited, apart from continuing to make representations to have the decision overturned before definitive duties are imposed.
In fact, the rifts within Europe that this issue has once again exposed are in some respects far more important than the face-off between the EU and the exporters. There have been the divisions between the domestic shoe industry, which supports the anti-dumping duties, and European importers and retailers of Asian shoes, who are opposed to them. Indeed, the attacks on the duties from within Europe have if anything been even stronger than those from China and Vietnam.
The line taken by organizations representing importers, retailers and producers of sport shoes has been that the duties would bring only higher prices and lost jobs in Europe. The European shoe producers entirely rejected these claims, and their arguments have generally been taken on board by the commission. The only major area where the European producers failed to win their case was in the argument for the inclusion of sports shoes in the anti-dumping measures.
The battle has also been fought between European governments. In this case Italy and Portugal, both of which still have relatively large shoe industries, have been strongly in favor of anti-dumping measures. Most other governments have been indifferent, or actively opposed to the measures, especially some of the northern European countries like Denmark.
At a meeting this month of EU trade officials which voted on the duties, it was reported that only three countries actually supported them, while 11 abstained and none or 10 voted against. Trade Commissioner Peter Mandelson took this as a signal to go ahead on the curious logic that there was "no majority against" the proposed duties.
Although claiming that the duties represented a reasonable action in the face of unfair competition, the commission has been curiously defensive in its presentation of them. Mandelson has insisted that they are not intended to target the natural competitive advantages of China or Vietnam, only to stop their unfair trade practices. It has also been at pains to reject claims that the duties will increase prices in Europe.
They will only affect about nine out of every 100 pairs of shoes sold in Europe and will add 1.5 euros (US$1.80) to the average import price of 8.5 euros for a pair of leather shoes that retail for 30-100 euros. The commission has also insisted that there is no relation between the measures against shoe and the restrictions on textiles imports that began last year.
The efforts to stop imports of shoes from China and Vietnam is part of a wider battle for the future of economic policy that is increasingly turning from an argument over how Europe should face the outside world to one over how it should conduct its own internal affairs.
The French government has been arguing for a policy of "economic patriotism", and has sought to protect its companies from being acquired even by other European companies. The French are not the only offenders, as other European governments have recently attempted to block acquisitions of major companies by buyers from within the EU.
The European Commission, which has the authority to oversee the workings of the internal market, generally adopts a pro-market stance. Several leading officials from the commission have attacked the idea of economic patriotism. So far, it has not taken any action on any of the current takeover disputes, but it is looking at the issues they have raised.
Mandelson insists that European industries should not look to anti-dumping measures as a shield to protect them from legitimate competition. Mandelson has said that it is not his intention to provide a carte blanche to protectionists in Europe who seek to avoid the effects of competition. Nevertheless, in some quarters in Europe protection is increasingly becoming the policy of first choice. There are other industries lining up to seek anti-dumping duties on imports from China and other parts of Asia, including producers of plastic bags and furniture makers. Several other products from China have already been subject to anti-dumping duties this year.
Whatever the EU's official position may be, there is little doubt that there will be trade frictions between the EU and China for the foreseeable future as European industries seek to protect themselves. These frictions will be part of a battle to determine the economic direction of Europe, as it struggles to adapt to global competition, but also to maintain faith in benefits of the free flow of goods, labor and capital across borders, which was an essential element in the vision of the founding fathers of the EU.
