RI shoe industry shaken by EU dumping case

JAKARTA (JP): Indonesian companies may lose about US$400 million in export revenue next year with the European Union's expected countervailing duties on Indonesia's shoe exports because of dumping there, the Indonesian Footwear Association said yesterday.

Association vice chairman Anton J. Supit said an investigating team from the European Union had concluded that about 14 footwear companies in Indonesia had dumped their products on the European market.

The team, which sent a fact-finding mission to Indonesia last year, concluded that the 14 companies, which produced six kinds of shoes with textile or leather and synthetic uppers, had practiced dumping since 1990.

The team has recommended that the European Union impose countervailing duties of between 2.1 percent and 31.7 percent on their products sold in Europe.

Import duties on shoes sold in Europe are now about 23 percent.

The team recommended that other companies, making similar products, which refused to be investigated last year, be subject to 50 percent countervailing duties, according to Anton.

The European Union antidumping commission will decide whether to introduce the duties recommended by the team next month.

Indonesian footwear exports are projected to be worth about $2.8 billion in 1997, about 40 percent of which will be sold to Europe. About 40 percent of the exports to Europe consist of shoes with textile uppers and shoes with leather or synthetic uppers.

Anton said that aside from Indonesia, the European Union team had accused several footwear companies in China and Thailand of dumping, and called for similar penalties against them.

The association's members met yesterday at the Millennium Hotel to work out a strategy to cope with the dumping accusation.

Anton said the association had hired a team of international lawyers to defend Indonesian footwear exporters during the European Union antidumping commission's hearings. The Indonesian government is lobbying strongly to try to prevent the imposition of the countervailing duties.

Anton regretted that many Indonesian footwear companies had refused to meet the team on the assumption that evading its investigations would protect them from dumping charges.

"Some other companies rejected the team of investigation because they had bad accounting reports," Anton added.

"Now they will also have to pay on average 50 percent in countervailing duties simply because they refused to be investigated by the team," he said.

Anton asked all the association's members to assist dumping investigations by importing countries.

"Today, global competition is so tight that some countries use dumping charges to protect their interests. We have to face it properly and legally. Don't be afraid," he said. (jsk)