In a bid to protect its own shoe-making and leather industries, the European Union proposed anti-dumping policies and duties against Asian shoes. The EU stated its intent last Tuesday as Asian exporters like India, Vietnam, and China flood European markets with cheaper but quality shoes. The EU felt that the low cost of Asian shoe exports threaten fair trade in the markets of Europe. If the EU succeeds in its bid, Asian exporters are likely to face an increase on tariff and exportation fees.

It was reported that the governments of EU-member countries would conduct a month-long debate about the proposed extra charge on Asian exporters. If approved, these extra charges may amount to an increase of 16.5% on Chinese shoes and ten percent for Vietnamese exports. The proposed increase is projected to affect 11 percent of every footwear pair purchased in EU's markets. The proposed increase will affect every kind of footwear exports from children's footwear to custom-designed shoes. The EU, in its proposal, pegged the duration of the tariff amendment for five years.

The EU officials stated that the extra duties and dues could increase the average cost of Chinese and other Asian shoes by euro1.40 or roughly almost two dollars in retail. If the Asian exporters and their EU partners decided to let the public shoulder the added costs, Asian shoe prices may cost euro36.4 or $46. The Asian shoe industry, particularly those of China, India, and Vietnam, are likely to suffer much as their main market -- children's footwear -- are absorbed into the policy.

The EU, for its part, defended its call to absorb kiddie shoes in the program. According to EU officials, the Asian shoe exporters and importers trick the system and the customs by labeling the smaller sizes of ladies' footwear as kiddie shoes. This had damaged the EU shoe manufacturing industry greatly according to reports. The reports and profit statistics indicated that European shoe production decreased by as much as 30% since the late 2001. Coincidentally, this is also the period when Asian shoes experience an upsurge in sales due to low importation and exportation costs. Because of the low costs in production and tariff fees, Asian shoe manufacturers were able to sell and dump the shoes in the markets of Europe for cheap prices against which the EU shoe industry cannot compete.

In EU, there is an estimate of 40,000 lost jobs presently. Although not solely because of the Asian exporters, they stiff competition posed by the Asian manufacturers aggravate the situation. The governments behind EU are split in supporting the proposal. If the situations do not change, the Asian shoe industry may still enjoy lower transport cost come October. The EU needs to be unified to implement the proposed increase in October.

Meanwhile, calls from the Asian community and shoe exporters are faced with deaf ears of the EU. The EU labeled the Asian shoe importers and exporters as cheaters. The shoe industry of Vietnam and China did not take the insult sitting down and denied the allegations. They, in turn, accused the EU governments of protectionism. Whatever the outcome of this shoe deal is, it is clear that the economy of EU and the Asian industries will be severely affected.