ITALY IN PLEA TO EU TO CONTINUE LEVIES ON ASIAN SHOES

Tony Barber
The Financial Times

Italy made a final plea to its EU partners yesterday to continue levying anti-dumping duties on Chinese and Vietnamese shoes, and denied that the campaign reflected protectionist in- stincts in the union's Mediterranean member-states.

"I refuse to be labelled a protectionist," Emma Bonino, Italy's EU affairs and international trade minister, told the FT in an interview. "I don't accept that from Milan south we are all protectionist, and from Milan north we are free market."

EU Ambassador are scheduled to meet today to decide whether to continue imposing duties on Chinese and Vietnamese leather shoes, which account for slightly less then 10 per cent on the 2.5bn pairs of shoes sold each year in the EU.

The decision will be close, because the 25-member bloc is split between countries that oppose teh duties, such as Germany, Sweden and the UK, and countries in favour such as France, Italy and Spain. A simple majority will be enough to settle the issue.

The UK has offered to back Italy in return for Rome defending London's opt-out from the directive limiting EU working hours. But Romano Prodi's leftwing allies are unwilling to go along with such a deal. Although Ms Bonino declined to identify which other countris might support Italy over shoes, Italian pressure is now focused on Cyprus and Belgium. Provisional duties expire on October 6 so new measures must be agreed before that.

Unless EU member states approve the European Commission's proposal to maintain the duties, the measures will lapse, a prospect that alarms those governments with big shoe-making lobbies.

Ms Bonino said she was disappointed at the attitude of Finland, which olds the EU's rotating presidency and opposes teh duties. "With the numbers so tight, the presidency should be more active in finding a compromise," she said.

Italy produces about 40 per cent of the EU's annual shoe output, but Ms Bonino said the Italian shoe sector had lost 2,365 jobs in the first six months of this year, largely because of what she called unfair foreign competition.

Ms Bonino said Commission data showes that provisional anti-dumping duties introduced in April had not pushed up prices or affected consumer demand for Chinese and Vietnamese shoe.

"Since April, these imports have risen by 31 per cent, but retail prices have kept their low-price trend, so consumers aren't complaining. No, it's the shoe importers and retailers, whose profit margin have been ridiculously high," she said.

Italy's foreign trade association, which represents importers and retailers, said on Monday that the duties "would damage trade, consumers and importers, without furnishing any benefit to European shoe-producers".

Ms Bonino rejected suggestions that the proposal to introduce duties of 16.5 per cent and 10 per cent respectively on Chinese and Vietnamese shoes was an attempt to protect Italian shoe producers from cheaper competition. "This measure will, in fact, push the producer to restructure his industry and innovate".