Success! EU members overturn shoe tariffs
By Timothy Cox
Friday, November 20, 2009
You may recall that a month ago, the Freedom to Trade campaign wrote about how EU once again fell prey to protecting vested interests, this time by threatening to extend a tariff to protect EU footwear producers -- primarily in Italy and Poland.
In a surprisingly sensible move welcomed by the Freedom to Trade Campaign, EU member states have voted to repeal these duties (by not extending them). This is only the first step -- the Commission must vote before the end of the year to make this a binding decision -- but it's a good sign.
Introduced in 2006 by then Trade Commissioner Peter Mandelson, the tariff was intended to protect EU cobblers from foreign competition. A true demonstration of how bad ideas have legs, the tariff was extended for 15 months in 2008 and was due to expire on October 7 this year.
The tariff was arbitrary - because it applied only to footwear imported from China and Vietnam, not Indonesia or other countries. It probably did little to help EU footwear manufacturers. Moreover, it was damaging, causing the loss of at least 40,000 jobs - at least according to Vietnam's Leather and Footwear Association.
The sad paradox is that in mid-2008, the EU announced its funding of an €11.8 million project “to provide jobs and income-earning opportunities” in Vietnam. Maybe it should try harder not to destroy jobs in the first place?
Let's hope that the Commission stands firm in the face of pressure from manufacturers. We concur with James Moore @ The Independent that EU consumers -- and we add, workers in Vietnam and China -- will be the real winners from this decision.
Update 1 - 2 December: A Reuters story reveals that we were overly optimistic. In a vote scheduled for 22 December, "European Union ministers are expected to vote to prolong import duties on shoes from China and Vietnam, overturning a rejection of the plan by a key EU trade panel, EU diplomats said on Wednesday." Stay tuned.