The European Commission on Thursday formally adopted provisional anti-dumping measures on Chinese and Vietnamese leather shoes to come into effect next month, despite serious disagreement about the move among member states.

As provisional duties do not require formal approval by European Union (EU) member states, the endorsement of the commission, the EU's executive arm, means the punitive measures can be implemented from April 7.

The anti-dumping duties are to be phased in over six months, starting at 4.8 percent and rising to 19.4 percent for Chinese shoes, and from 4.2 percent to 16.8 percent for Vietnamese shoes, the commission's trade spokesman Peter Power told Xinhua.

But children's shoes and high-tech sports shoes will be excluded from the tariffs.

EU DEFENDS ACTION, SEEKING DIALOGUE

EU Trade Commissioner Peter Mandelson said on Thursday that the measures were targeted against what he labeled as "unfair distortions of trade," and he expects the taxes to "correct the injury caused to European leather shoe producers."

Mandelson said that he was willing to work with the Vietnamese and Chinese governments to address the questions raised by the commission's investigation.

Also on Thursday, European Commission President Jose Manuel Barroso said the EU "favors dialogue" and "cooperation" in handling trade disputes with such an "important partner as China."

Power told Xinhua that the EU had been in regular contact with the Chinese government over the issue. He said trade relations with China were "extremely important" to the 25-nation bloc, and Brussels hoped to solve the dispute through dialogue.

Announcing his proposal to impose higher taxes last month, Mandelson claimed that the commission's investigation had found clear evidence of Chinese and Vietnamese producers "dumping" leather shoes in the EU at below-cost prices and "violating" world trade rules.

He claimed that state subsidization in the two countries had " distorted" competition in the EU's shoe market and said that trade penalties were necessary to curb inflow of these cheap imports.

DUTIES MEET CRITICISM

Mandelson's proposal has sparked protests from China, Vietnam and the leading shoe producing companies in Asia.

China and Vietnam have dismissed the allegations as groundless and said the proposed sanctions were unfair and urged the EU to reconsider the measures.

It also met harsh criticism from European shoe retailers and importers, who said that such measures would hurt European consumers and were detrimental to the EU economy as a whole in the long run.

The "protectionist" action could not help EU shoe producers or boost employment as is hoped, they said.

ACTION GENERATES INTERNAL ROW

EU member states were split in the latest vote on Mandelson's proposal on March 16, but the coalition in favor of free trade was not strong enough to prevent the proposal from taking effect.

Among the EU members, as was reported by European media, three countries Belgium, Slovakia and Malta voted in favor of the duties. Ten, including Sweden, Ireland and Slovenia, voted against and 11 abstained, including Italy and France.

Abstentions are counted as votes in favor.

Scandinavian countries, traditionally the EU's biggest supporters of free trade, have rejected the need for anti-dumping duties. Sweden called Brussels' policy as being "protectionist".

On the other end of the spectrum, Italy, which has a large shoe industry, has also protested about the measures, saying they are not tough enough.

The EU will review the tariffs by the end of the six-month provisional period and decide whether to keep the duties for the following five years, which will be definitive.

Definitive duties have to be approved by all EU member states. The European Commission has said it will try to "establish a consensus among member states on a definitive course of action when the investigation is concluded in the autumn."

The EU dumping claim against Chinese and Vietnamese leather shoes was

initiated last July in parallel with a similar claim against work shoes.

Last month, Mandelson said that he had decided not to take action against work shoe imports from China because no evidence had been found that such imports had hurt the European industry.

Source: Xinhua