Spain Announced New Regulations Over Shoes Import
Elche is a traditional shoemaking base for Spain and for Europe as a whole. It is known as "shoes capital city of Spain". In recent years China shoemakers, mostly from southeast Wenzhou City, have found great business opportunities there and come to the area to register companies and rent or buy shops. With low price and high quality, the Chinese shoes have been well received by local customers. Now there are more than 80 Chinese shoes warehouse in Elche. This has had a detrimental effect on Elche's local industry, with over half local manufacturers closing and only the lower end of the market able to match prices. The Spanish government has continuously instigated measures to protect local producers.
Recently chairman of Chinese-Spanish footwear association, Mr. Liu Guangzhong, said that the Spanish government announced a new regulation over national shoe import. If shoes exported to Spain were considered to be low-quotation, the exporters would be heavily fined. The policy has a big effect on those china Wenzhou enterprises, Some renowned shoe enterprise have withdrawn from Spanish market.
The content of the new regulation is as below: When shoes are exported from other countries to Spain's local customs, the customs worker will compare the price of shoes according to their material and styles with similar products. If the shoes price is lower than the price of customs nomenclature, the goods will be impounded. And the exporter should pay additional tariff, value added tax and other penalty to get goods back.
This regulation make Mr. LiuGuangzhong and China Wenzhou shoe manufactures astonished. The footwear import tariff of Spain is 17 percent, value added tax 18 percent and the penalty is set according to the repaid tax quota. The quoted price is generally 1 Euro or least while the price of customs nomenclature reaches 4-5 Euro or more. The Spanish government has never made such strict measures on imported goods quotations. This new policy is made possibly to alleviate the recent financial crisis in Spain. Local shoemakers are in crisis because of competition from Asian, and especially Chinese manufacturers.
China Wenzhou shoe manufacturers are also showing understanding to Spanish government's new policy. However, they don't agree with the standard to determine "low-quotation" shoes. The price on Spanish customs nomenclature is set according to the price in the Spain and EU market. The production cost in EU is much higher than China. To determine low-quotation with shoes price of EU is unequal to the China Wenzhou enterprises.
The shoes burning incident happened on September 16,2004 sounds a warning to China Wenzhou shoe manufacturers in Europe. As of January 1, 2005, the EU has lifted import quotas on some categories of China-made shoes. This not only offer a bigger market share for Wenzhou shoe manufacturers in Europe but also usher in more trade disputes. As the Spanish government has yet to instigate measures to protect local producers, Chinese shoemakers have encountered more and more difficulties.