ITALY RAISES STAKES IN EU SHOE DUTY BATTLE


Italy has raised the stakes in its campaign to hit Asian shoe imports with anti-dumping duties, with Prime Minister Romano Prodi personally lobbying other EU leaders to support the measures in a vote this week.
Italy is leading a push by EU shoe-producing countries for duties on leather shoes from China and Vietnam but which has so far been resisted by a majority of capitals in the bloc.

"The prime minister has spoken to some other leaders," an Italian diplomat told Reuters, adding Prodi was following up on a letter sent recently by Italian Trade Minister Emma Bonino to EU capitals on the issue. Escalation of the case to the top level of governments underscores how deep the rift is within the EU between countries that favor free trade, led by the Nordics, and those that want more protection for their industries from cheap Asian imports.

The issue of dumping has also been an irritant at an EU-Asia leaders summit in Helsinki that ended on Monday. China and Vietnam have denied dumping by their exporters.

"It's becoming very political," said an EU diplomat, referring to Prodi's campaigning. "Italy is raising the stakes but so far it seems countries are sticking to their positions."

Last month, 14 of the EU's 25 member states objected to a proposal from the bloc's executive Commission for anti-dumping duties of 16.5 percent for leather shoes from China and 10 percent for Vietnam.

But the Commission has stuck to the proposal and now faces a vote on Wednesday by EU trade experts before being submitted for higher-level approval later in the month.

Among the countries approached by Prodi is current EU president Finland. It was part of the "no" camp last month but Italy has argued it should abstain from Wednesday's vote because of its role as rotating head of the bloc, EU diplomats said.

"We are traditionally a free-trading nation and we did not see any grounds for moving on these anti-dumping measures so I would expect that we act accordingly," said Finnish Foreign Minister Erkki Tuomioja.

On anti-dumping proposals, abstentions are counted as votes in favor.

The European Commission said earlier this year it found evidence of tax breaks and other state intervention by China and Vietnam which unfairly helped their shoe exporters.

It imposed provisional anti-dumping duties in April which lapse on Oct. 6 without backing from a majority of EU countries for their replacement by definitive, five-year duties.

The shoes row is seen as a prelude to a wider debate in coming months on a possible overhaul of the anti-dumping rules that EU trade chief Peter Mandelson has proposed in order to reflect growing investments by European manufacturers in Asia, and the interests of consumers who want cheap goods.

Prodi, himself a former European Commission president, is due to set off for a visit to China on Tuesday.