The EU’s trade dispute with China risks spreading from textiles to footwear after the EU released data Wednesday which purported to show that Chinese shoe imports had surged since the end of quotas at the start of the year.
“Responding to concerns of European shoemakers, the European Commission said imports of leather shoes and textile slippers had soared nearly eight-fold in the first four months of 2005, pushing down prices on European markets by 28 percent. Shoemakers from Italy have sent more than 200 letters of complaint to the Commission in the past two weeks, according to Leonardo Soana, director general of Italy’s National Footwear Association.
They charge that China, and to a lesser extent Vietnam, are dumping leather shoes on the European market and putting shoemakers out of work.
Soana told Dow Jones Newswires that Italy’s shoe industry will present a formal complaint on June 15, alongside claims by Spain and Portugal. French, Greek and Polish industry groups will back calls the for tariffs on Chinese shoes, he said.
Looking at the list, it is pretty clear which parts of the EU are being most hit by these ‘bottom end’ imports from China, and why: they are generally the economies which are most challenged by the need to move up the value chain. That being said, and correcting slightly an earlier renminbi post, it is obviously the case that the rise of the euro against the dollar, has also been a rise against the renminbi, 40% or so in 3 years, so it is clear why there is a ‘pain barrier’ now in Europe.
However on the free trade angle, Stumbling and Mumbling has a nice quote from Scottish Economist and Philosopher David Hume which is very much to the point:
“There are few Englishmen who would not think their country absolutely ruined, were French wines sold in England so cheap and in such abundance as to supplant, in some measure, all ale, and home-brewed liquors: But would we lay aside prejudice, it would not be difficult to prove, that nothing could be more innocent, perhaps advantageous. Each new acre of vineyard planted in France, in order to supply England with wine, would make it requisite for the French to take the produce of an English acre, sown in wheat or barley, in order to subsist themselves; and it is evident, that we should thereby get command of the better commodity.“