MEXICO REJECTS SHOEMAKERS' APPEALS OF PENALTIES

MEXICO REJECTS SHOEMAKERS' APPEALS OF PENALTIES

The Secretaria de Comercio y Fomento Industrial (Secofi) - Mexico's commerce ministry - has rejected appeals by footwear giant Nike and other shoemakers to revise stiff unfair-trade penalties imposed on Chinese-made shoes.

Writing in Friday editions of Diario Oficial, Mexico's federal register, commerce officials formally turned down an appeal brought by Nike de Mexico, Payless Shoesource, Footlockers de Mexico, Woolworth Mexicana, the Rockport Company Inc., Footwear Distributors and Retailers of America and others.The footwear and retail companies appealed to Secofi for a revision on Dec. 14, 1994, and Secofi began querying them on Feb. 17, 1995. Investigators said the companies failed to provide sufficient technical proof to warrant a

revision of penalties.

The case dates back to Dec. 30, 1993, when Secofi imposed compensatory trade duties on Chinese footwear ranging from 165 percent to 323 percent. The trade penalties affected shoes falling under Mexican tariff numbers 64.01, 64.02, 64.03, 64.04, 64.05 and 65.06.

The stiff penalties, in line with a broader effort to keep out Chinese-made products found to be hurting domestic manufacturers in Mexico, were a blow to U.S.-based multinational companies making shoes and U.S. retailers in Mexico who stock their shelves with Asian-made goods.

U.S. footwear distributors and retailers also face closed doors in Mexico

because of tough certificate of origin requirements. In an effort to keep out Chinese shoes moving through third countries - known as triangulation - Mexico now requires original certificates of origin from China and other countries that do not belong to the World Trade Organization (WTO).

U.S. retailers and footwear companies have traditionally re-exported to Mexico a portion of their import inventory. They can no longer do so because U.S. customs requires the original certificate of origin.

Consequently, U.S. retailers and footwear distributors operating in Mexico can import directly into Mexico but seldom do because the volumes do not warrant a direct shipment.