The Pre-APLF meetings of both the International Council of Tanners (ICT) and of the International Council of Hides Skins and Leather Traders Associations (ICHSLTA) talked at length about the detail and potential impact of the new duties being applied to incoming hides and skins into China. However, it was not apparent whether delegates were a great deal clearer on the subject at the end of the day than they were at the start. 

There is confusion and concern as hides and skins entering China, to be subsequently exported, are now subject to duty of 5% and VAT of 17%, with no possibility of reclaiming this on export.

This came as a shock to many Chinese tanners who are now appealing the ruling and are hoping to have the law repealed, in part at least. However, this will be no easy task as the reform has already been approved in six government ministries, and each of these will have to be lobbied.

What is not clear is how and if it is currently being applied, as some tanners are complaining whilst others appear unaffected. This may be due to varying situations concerning registered handbooks” as when a company is in possession of such a handbook they are not liable for the tax until the end of 2006.

The US delegation, whose government sent a team to Beijing to discuss the issue last December, renewed an offer to send environmental advisers and technicians as it appears that the reason behind the tax stems partially from a desire to reduce environmental damage.

At the meetings, there was a general feeling that Chinese tanners would be unable to absorb or pass on such an increase and that rawhide suppliers would have to depress prices. On the other hand the EU tariffs on Chinese footwear have clearly caused consternation amongst the Chinese industry and government, who think the move unfair and improper. They view it as compromising free trade and a crude attempt at trade protection, which they think will serve no one beneficially.  In both meetings, Chinese delegates made an appeal for the withdrawal of these new duties and indicated that legal action against the EU was under consideration.