European Union : No Protectionist Surprises

On 3 October 2008, the EU launched a review of anti-dumping duties on leather shoes from China and Vietnam. In December 2009, the EU decided to extend duties on the imports of leather shoes from China and Vietnam for another 15 months. This affirmative decision was taken despite heavy protests from consumers, importers and outsourcing firms, and it overruled the negative advice that had been formulated earlier by the EU Anti-Dumping Advisory Committee. The review procedure was launched just a few days after the collapse of Lehman Brothers, which marked the outbreak of the Great Recession and fuelled the fear that the EU would engage in a ‘protectionist spiral’. In such a spiral, some countries would raise protection in order to counter the negative spillovers from the financial sector on the real economy. Other countries would become adversely affected by this protection and then start to retaliate. The question is whether this review marked the beginning of a more protectionist attitude in the EU in the face of the global recession.