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Asian Shoe Exports to Europe

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by

Anna Gregory

on 1 July 2014

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Transcript of Asian Shoe Exports to Europe

Asian Shoe Exports to Europe
When tariffs are imposed on European imports of shoes from China and Vietnam, who stands to gain? Who stands to lose?
European policy makers object to the fact that some Asian shoe production is government subsidized. But, as an editorial in the Financial Times noted, "If Beijing and Hanoi want to subsidize European consumers to build their shoe collections, let them." Do you agree?
Answer
NO, we do not agree
Government subsidies on shoe production is an unfair advantage
However, they can be counteracted by the increase of tariffs.
Answer
Consumers within the EU market stand to gain
Lower prices, large selection, competition between brands
Local economy stands to lose
Impacts sales volume, hurts market share, triggers the decline of profitability which leads to loss of jobs

Antidumping duties can be described as a form of protectionism. As the global economic crisis deepened in 2008 and 2009, many countries began implementing protectionist policies. Is this a positive trend, or are such policies trying to prolong the recession?
Summary
Consumers in Europe buy 2.5 million pairs of shoes
Shoes from China currently account for 1/3 of the market since 2001 when China joined the WTO
Imports from Vietnam also doubled in the same period
European Commission imposed tariffs for a period of two years
Tariffs will affect 11% of the shoes sold in Europe
Votes: 13 to 12 which reflect divergent views in Europe about how to deal with low-cost Asian goods
These tariffs are known as anti-dumping duties (when products are being sold in export markets for less than the selling price in the exporter's home country)
China and Vietnam are considered "non-market economies"
Investigators proved dumping by comparing the cost of imported shoes to the price of shoes produced in true market economies
According to the Financial Times:
Anti-dumping duties are usually used in large-scale, capital- intensive industries
Example: steel
"Shoe making is not a strategic industry with gigantic economies of scale and barriers to entry where predatory export pricing could deliver an exploitable competitive advantage"
The tariffs resulted in lower import levels from China and Vietnam, but imports from other emerging markets surged.

Answer:
Protectionism
is the economic policy of restraining trade between states/countries through methods such as tariffs on imported goods and restricted quotas. It is designed to promote fair competition for goods and services produced domestically.

YES
It is a positive trend. It encourages domestic output while limiting dependence on imported goods.
Full transcript