Aokang anti-dumping win 'positive precedent'

By winning a lawsuit on Sunday against the European Union's anti-dumping duties after a six-year battle, Chinese shoemaking giant Aokang Group Co Ltd has encouraged more domestic manufacturers to challenge such unfair policies, experts said.

The European Court of Justice made the final ruling that the European Commission needs to pay all of Aokang's litigation expenses and refund the paid anti-dumping duties to Aokang's trading importers, which are estimated to total around 5 million yuan ($802,000).

As the first Chinese shoemaker to begin proceedings in the EU court in 2006, Aokang overcame a loss in a lower EU court in 2010 to receive the news it had hoped for from the European Court of Justice in the subsequent appeal.

"Aokang was the only company among five enterprises that insisted on lodging the second appeal after losing the case in April 2010, and finally won the case with difficulty," said Wang Hailong, spokesman for Aokang Group, a Wenzhou-based shoemaker that has strategic cooperation partners in Europe, including Geox and Valleverde.

Wang added that the ruling will benefit other trading companies that had been affected by the anti-dumping duty policies.

Trade protectionism in the name of "anti-dumping" had already affected Chinese leather shoemakers, whose exports to Europe rapidly decreased since 2006 when the EU began levying punitive tariffs of 16.5 percent on Chinese footwear for two years. The levies were later extended through March 2011.

Before the EU imposed the anti-dumping measures, China's leather-shoe exports to Europe had expanded at an average annual growth rate of 20 percent, which ended with the imposition of the duties.

Statistics from the Ministry of Commerce showed that the EU's punitive action has made 20,000 people jobless and reduced China's footwear exports by 20 percent from 2006 to 2010.

For other shoe manufacturers, the case of Aokang has brought confidence and courage to tackle similar unfair policies.

"We've never thought of appealing to the EU over the anti-dumping duties that severely affected our businesses in Europe, but transferring the focus to other countries," said Pan Jianzhong, chairman of Wenzhou Juyi Group Co Ltd, a shoe manufacturer.

Pan added that Aokang's case has encouraged local trading manufacturers to fight for their own rights under the law, which finally will bring them justice.

In addition, it is also a good sign for local associations that had witnessed hundreds of enterprises squeezing profits as a result of the duties before 2011.

"Although not many enterprises have enough money, as Aokang does, to appeal twice over such a long time, we still encourage smaller companies facing similar unfair policies to file lawsuits as a group to minimize the expenses and shorten the preparation period," said Xie Rongfang, secretary-general of the Wenzhou Shoe and Leather Industry Association.

Lawyers suggested that the case of Aokang's challenge in the European Court of Justice is an excellent precedent for other manufactures dealing with cases against foreign issuers.

"The anti-dumping duty policy issued by the European Commission was a kind of self-protective measure to ensure the benefits of their domestic suppliers, which was unfair to Chinese manufacturers for years," said Li Jiangang, a foreign case lawyer Yingke Law Firm Shanghai Office.