Decom, the Trade Defense Agency of the Brazilian government, has announced the continuation of the investigation to review its anti-dumping measures against footwear from China. The agency indicated that it had found elements of ongoing dumping, but apparently, it also admitted that there has been no further injury to the Brazilian shoe industry related to the Chinese imports. A final ruling is expected by March at the latest.
Imports of footwear to Brazil from China have declined to about $55 million a year from $218.7 million in 2008, when Abicalçados filed its original dumping complaint. Several sports brands have redirected the flow of goods into Brazil, sourcing them from Vietnam and other countries.
The Brazilian government's review, which started in April, is set to last ten months, with an option for two extra months, thus finishing on March 5, 2016 at the latest. Until then, the current anti-dumping duty of $13.85 per pair on shoes from China will continue to be enforced.
The extension of the duty is meant to allow the government's inspectors to complete their investigations and to allow all the parties to take up a position on the findings. The details of the findings have yet to be announced, but Ápice, the Brazilian sporting goods industry association affiliated with the World Federation of the Sporting Goods Industry, is wondering why the investigators adopted different calculations to determine “normal value” and “export prices” in Indonesia and China, respectively.
The Brazilian shoe industry association, Abicalçados, requested the extension of the duty last March, proposing to retain Italy as the analog country in the investigation that led to the imposition of the present anti-dumping duty in March 2010. Several interested parties, such as domestic manufacturers, importers, exporters and Apice asked and obtained a change in the analog country to Indonesia, arguing that most of the shoes imported into Brazil from China are more similar to those that are produced in Indonesia than in Italy. That includes a large volume of technical sports shoes.
Indonesia has been chosen as the analog country to calculate dumping by Chinese manufacturers because China is still considered to be lacking a market economy. There is a growing consensus within the World Trade Organization, to which China belongs, to change its status to that of a market economy, in spite of opposition from Italy, the U.S., Japan and some other countries. Analysts speculate that China may be able to reach market economy status as early as Dec. 11, 2016, based on a strict application of WTO regulations, or by 2018 in case of litigation before the WTO Appellate Body.
Observers feel that the final decision of the Brazilian government will be largely political. It may depend in part on the future administration of the country. President Dilma Rousseff, who was re-elected a year ago by a narrow margin, faces possible invalidation of her victory following the discovery of irregularities in her presidential campaign. She also faces parliamentary impeachment in connection with a major corruption scandal involving Petrobras, the state oil company, and other issues.