New customs duties on shoes: whose interests do officials protect?

On November 21, 2011, at a meeting of the subcommittee on protective measures in foreign trade and customs and tariff policy, chaired by First Deputy Prime Minister Viktor Zubkov, it was decided to increase the Euro component from 1,8 euros / pair to 2,5 euros / pair in relation to Import duties on certain types of leather shoes.
 
Thus, at the December meeting of the Customs Union commission, 3 different points of view will be presented: the Republic of Belarus proposes to close the market for imports - 20%, but not less than 2,7 EUR / pair, the Republic of Kazakhstan - against tariff changes, Russian officials - in spite of economic realities the market made their decision. Realizing how grave the consequences of increased customs duties may be for consumers and legal market players, the National Shoe Union intends to seek a revision of the decision.
 
Even before the official discussion of the issue by the Russian side, the National Shoe Union, as well as Russian retailers and importers of footwear, opposed the increase in customs duties. In particular, experts noted that such a decision would result in a significant increase in prices for consumers and an increase in the share of the shadow footwear market, which today is about 40%. At the same time, as practice shows, the protective measures do not stimulate Russian footwear manufacturers. So, since 1996, the volume of production of leather footwear has practically not grown and today, together with the state order, is only 3% of the volume of consumption. “At the same time, the range of manufactured products is very scarce and amounts to 10% of the consumed by the population. There is no production of model, heeled women's shoes, modern sports shoes, ”notes Natalya Demidova, Director General of the National Shoe Union.

An increase in the duty on cheap shoes will lead to higher retail prices and an even greater financial burden on low-income people who will be forced to return to clothing markets. Small and medium-sized businesses operating in this segment will suffer.
 
“At present, the average Russian, who has a lower income than the European, is forced to buy shoes at a higher price. But, apparently, this is not enough for officials, ”says Natalya Demidova. "The proposed measure will not lead to an increase in the production of domestic products, but will cause a new wave of corruption, smuggling, and reduce tax revenues to the budget."
 
In connection with the decision of the subcommittee, the National Shoe Union plans to hold a round table in early December with the participation of leading economists and representatives of the shoe business. During the meeting, the place of Russia in the global footwear business will be discussed following the results of the World Footwear Congress and a consolidated position will be developed on the issue of effective measures for the development of the Russian footwear market as a whole.