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UPDATE 2-EU ministers vote to extend Asian shoe duties

Published 12/22/2009, 09:28 AM

* Tariffs to be extended from Jan. 3

* Decision angers China and consumer groups

* China says it will appeal to WTO

(Adds Chinese reaction, paragraph 5-7, 15-16)

By Darren Ennis

BRUSSELS, Dec 22 (Reuters) - European Union ministers voted on Tuesday to extend import duties on shoes from China and Vietnam by 15 months, provoking an angry response from China and frustration among European retail groups.

The decision was taken despite a vote on Nov. 19 by the EU's anti-dumping committee, made up of senior trade officials from the 27 member states, to reject plans to extend the tariffs, which consumer groups say will lead to higher prices.

"The shoes proposal was adopted," an official involved in the talks in Brussels said.

The extended duties come into force from Jan. 3 and amount to a 16.5 percent tariff on imports of Chinese leather shoes and 10 percent on those made in Vietnam.

China said it was unhappy with the decision and would take action via the World Trade Organisation.

"China is extremely dissatisfied," Yao Jian, a spokesman for China's Commerce Ministry, said in a statement on the ministry's website (www.mofcom.gov.cn).

"(China) opposes the European Union extending anti-dumping measures in any shape, will appeal to the WTO's dispute resolution mechanism, and will take corresponding steps to earnestly protect the legal rights of Chinese industry."

European retailers and global shoe brands have expressed frustration at the decision, which is likely to lead to higher prices for consumers. Chinese- and Vietnamese-made shoes are estimated to make up 30 percent of the EU market.

"This move will be a signal to failing companies around Europe that the Commission will step in and protect them from foreign competition," said Alisdair Gray, the director of the British Retail Consortium.

"Despite losing the vote on numbers, consumers will have to keep paying inflated footwear prices for a further two years."

UNABLE TO COMPETE

The European Commission, the EU's executive arm, first imposed the import duties in 2006 after European shoe manufacturers complained they were unable to compete with low-cost producers in China and Vietnam.

The manufacturers said the Chinese and Vietnamese governments were providing unfair subsidies that lowered costs for domestic manufacturers, giving them an unfair advantage in the EU, the world's largest trading bloc which has a market of 500 million people.

Austria, Germany and Malta opposed the extension but, ahead of Tuesday's vote, indicated they would abstain, allowing the extension to be adopted by a majority of countries.

The Commission last extended the duties in October 2008, angering China, many global shoe brands, leading European shoe retailers and consumer groups, who argued that the measures would drive up the costs of shoes for everyone.

"It seems ludicrous that the EU would want to artificially inflate the prices of shoes at a time when we are trying to encourage high street spending," said Robert Sturdy, a Conservative member of the European Parliament.

"This is a tax that will affect consumers and retailers in their pockets at a time when necessities such as shoes should be as cheap as possible." (Additional reporting by Ben Blanchard in Beijing and Luke Baker in Brussels; editing by Andrew Dobbie)

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