Tuesday, February 21, 2006

The EU's "Shoe War"

Citing "serious state intervention in the leather footwear sector" in China and Vietnam, EU Commission spokesman Peter Power is heralding tariffs on shoe imports as of April. This will put about one euro on the cost of a pair of shoes from those countries.

We can only hope that this new piece of protectionist actionism doesn't lead to the disasters incurred by Peter Mandelson's "Bra Wars" of last year, when retailers were stopped from taking delivery of orders they'd made prior to the ban on textiles from China. Empty shelves and bust businesses resulted - in what was described as "the worst retailing crisis since WWII" - before a compromise was patched together to save Commissioner Mandelson's face.

Mandelson is still at his post But the new protectionist move - just like the last one - is supported by countries with strong leather goods industries and a tradition of state protectionism, such as France and Italy, and opposed by those which don't, such as Holland and the Scandinavian countries. It is a most unhelpful move from the EU at a time when protectionism - not merely European, but American too - is increasingly jeopardising the consumer benefits of global markets.


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