Anti-dumping fiasco:World Trade Organisation alerted

China recently filed a complaint with the World Trade Organization (WTO) over the European Union's extension of anti-dumping duties on Chinese-made leather shoes. This action has triggered the WTO dispute settlement procedure. The EU started levying anti-dumping duties against leather shoes imported from China in 2006. These were extended by another 15 months in 2009 by the EU's executive body. Over the past 10 years, Europe's shoe-making industry has been in decline whilst their counterparts in Asia and the Middle East have been burgeoning. The quota restrictions were imposed by the EU to protect the industrial sector. The result has been European consumers now pay more for footwear and because of falls in imports from China 20,000 Chinese shoe workers are now without jobs.

Chinese import embargos stay in place say EC

The European Commission will extend the anti-dumping duties on EU imports from Chinese and Vietnamese shoes by at least the next 15 months. According to EU statistics European producers’ share of the EU market fell from 65 per cent to 40 per cent between 2001 and 2005, mostly because of inroads by China and Vietnam. Since the duties were imposed, the Chinese and Vietnamese share of the leather-soled shoe market has remained stable at around 30 percent, with European shoemakers holding between 40 and 45 percent. Some believe continuation of the duties will help stabilise the market share of European producers while pushing up consumer prices only slightly. Others say because Europeans do not want the low-paid work of making shoes they are forced to go elsewhere to stay competitive. The European Footwear Alliance (EFA), representing manufacturers such as Nike, Adidas and Timberland have paid more than 800 million euros (1.2 billion dollars) in these taxes and have called for an end to the duty. The anti-dumping duties on footwear are essentially fines for exporting goods below production cost and these were first applied in October 2006 costing the manufacturers with operations in those countries hundreds of millions of euros. Key to the battle between Europe’s manufacturers and retailers is the issue of country of origin. Italian manufacturers want compulsory labelling of country of origin on clothing and footwear. The debate over country of origin is an important battleground within the World Trade Organisation, where emerging markets oppose compulsory labelling of geographic origin, while many traditional European manufacturers regard it as an emblem of quality and standard.

Export Footwear Industry:Potential crisis looms

According to recent reports in the business and financial press the footwear export industry may have a crisis after it was discovered Yue Yuen, (the largest original equipment manufacturer (OEM) of shoes for Nike and adidas), recorded a loss in net income in the first seven months. Seems in China both increased costs of raw materials and labor are having an adverse effect on production. Nike has already closed its self-owned shoe factory in China and will transfer its production base to Vietnam and Indonesia, where the labor force and materials are cheaper.

Nike: Underage workers?

Recent reports from China indicate workers at the Longfa Shoe Factory in China’s south eastern Guangdong province are underage. Further it has been alleged officials switched their identification papers to make them seem older when members of China’s largely Muslim Uyghur ethnic group were sent to work in a shoe factory thousands of miles from home. The facility currently employs 660 workers through a program known as “Transfer Surplus Workforce Outwards.” More than half of the workers are female, and some 300 are under the age of 18. Longfa Shoe Factory is owned by Taiwan-based Dean Shoes Co. Ltd., which supplies Oregon-based U.S. footwear giant Nike, Inc. The legal working age in China is 16 but according to Nike’s code of conduct, their contractors do not “employ any person below the age of 18 to produce footwear” and to hire underage workers would violate company policies. Both companies have denied the allegations.

Michelle's favourite shoes are made in China

Generally Chinese exports have fallen since late last year as the world financial crisis hit overseas demand for products. The slowdown has led to the closure of thousands of factories, while at least 25 million migrant workers from poor rural areas are now unemployed. Michelle Obama has set the foot fashionista in a buzz wearing Bandolino Berry’s dress shoes. Reoblan Footwear, a manufacturer based in the Sichuan province, China is working overtime to churn out the high-heeled Bandolino Berry for an ever eager set of US consumers where oreders have soared. Last year the manufacturer exported 500k pairs but were giving orders for 200k pairs in March of this year, thanks to the First Lady’s favourite dress shoe.

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Bespoke Foot Orthoses: CAD/CAM

Foot orthoses come in different types from simple insoles to biomechanically calculated platforms to help stabilise the foot during phases of walking. In recent years there has been a sizable industry grown around the manufacture and prescription of the latter which is now estimated at $30 million US per anum. Prescribed foot orthoses often referred to as function foot orthoses are used by sports specialists, surgeons, physiotherapists and podiatrists and prices vary from $20 to $300 per pair depending on the type, time spend and materials used. Over the counter foot orthoses are often as effective as bespoke varieties but due to the material combinations may not always last quite so long. Conditions definitely apply. For over a decade the manufacture of foot orthoses has involved Computer Numerical Controlled(CNC) systems where CAD/CAM software programs are used to produce a computer file that is interpreted to extract the commands needed to operate a particular machine, and then loaded into the CNC machines for production which involes a complex series of steps needed to produce in this case a foot orthoses. CAD software produces 3D scanned design data which can be manipulated to add a range of models, add-ons and cut-outs or corrections to the foot mould. Many companies which supply bespoke foot orthoses use the technology to increase their production. The established method of producing bespoke foot orthoses was both time consuming and prone to human error. After physical examination of the leg and foot, technicians took plaster of Paris moulds of the feet set in a reference position. These negative casts are then filled with setting plaster before drying at hot temperatures. When the foot models are completely dried high temperature plastics are melted over the prepared cast before trimming. The process of creating unique prescriptions for patients suffering from various foot and joint ailments will take anything from 3 days to three weeks to complete. A primary advantage of CAD/CAM manufacture is the time reduced in producing quality foot orthoses as providing prescribed quality foot orthoses in a timely fashion translates well to high profits. Turnaround time is extremely important in the bespoke foot orthotic business. Delcam's OrthoModel , is a new software specifically for modelling and machining custom foot orthoses. Once the information is input into the OrthoModel CAD software, the information is transfered to the CAM component OrthoMill and routed to complete the milling process. Top covers and other finishes are added once the foot orthoses have been milled. Delcam Crispin is a UK based company founded in 1965 and their software includes a series of menus which incorporate the biomechanical terminology used by the industry to describe the various features of the foot orthosis.