Vietnam's shoe industry to pay high price for EU levies
Vietnam's shoe industry will pay a high price in lost earnings and jobs because of the new European Union anti-dumping measures levied on its exports, industry officials said Thursday.
The EU on Wednesday adopted new anti-dumping measures on imports of leather shoes from China and Vietnam after a heated debate between producer countries such as Italy and consumer nations seeking to keep a supply of cheap goods.
Nguyen Gia Thao, president of Vietnam's Leather and Footwear Association (LEFASO), was quoted by the Vietnam News Agency as saying there had not been any "violations of international trade rules" to justify the levies.
The final cost has yet to be calculated, VNA said, but "it is certain that it will affect the jobs of between 60,000 and 70,000 workers in the industry and some small-scale enterprises will face bankruptcy.
"The EU's anti-dumping measures will not only cause difficulties ... for more than half a million Vietnamese workers ... in the leather and shoe industry, but also for many others whose jobs service the industry and who are already living under the poverty line," it said, citing the industry group.
The EU agreed 13-12 in the narrowest of votes Wednesday to impose a standard duty of 10 percent on imports of Vietnamese leather shoes, replacing an emergency levy of 16.8 percent, effective for two years from October 7.
It will also impose a 16.5 percent duty on Chinese shoes, in place of the current temporary duty of 19.4 percent.
Last year, Vietnam exported some 265 million pairs of shoes to the EU, with China selling 1.2 billion pairs.
After a 15-month investigation, the EU found that shoemakers in China and Vietnam unfairly benefited from state aid in the form of soft loans, tax breaks and cheap rents, allowing them to unfairly undercut European manufacturers.
As Chinese and Vietnamese imports swelled, European footwear production fell by nearly a third in the last five years, costing 40,000 jobs, sparking the campaign to curb the trade.
EU Trade Commissioner Peter Mandelson described the measures Wednesday as "appropriate and proportional" but the move is a serious concern, especially for the smaller local producers, industry officials said.
Jacques Rostaing, president of French Rostaing Vietnam, a leather products company, said the big groups "won't suffer, they are big machines that will look to other countries to produce but Vietnamese producers will be hit hard."
In a longer-term, the impact could be more serious still as foreign buyers look elsewhere.
"A foreign buyer will not take the risk to go directly to a Vietnamese producer. He will buy from a big Asian company that has the capacity to relocate production according to the development of the market," he said.
According to LEFASO, the Vietnam industry group, the local footwear sector employs some 500,000 workers directly, with another one million in associated jobs. Around 80 percent of the workforce are women.
Last June as the issue came to the fore, anti-poverty group ActionAid estimated anti-dumping duties would impact nearly one million people in the developing country, many of whom already live on around one dollar a day.
The General Statistics Office said Vietnam earned 2.64 billion dollars from footwear exports in the first nine months of 2006, an increase of 21.4 percent over the same period last year.
According to LEFASO, total shoe exports last year were worth 3.0 billion dollars, including 1.8 billion dollars to the EU.
The Americain Chamber of Commerce backed LEFASO, suggesting the EU decision could be a "protectionist" measure.
"What is not clear is if the EU case is the result of a trade dumping issue or of a trade barrier issue," Walter Blocker, Amcham president in Ho Chi Minh told AFP.
