After almost two months investigating eight shoemakers in Viet Nam about dumping leather shoes to EU, the European Commission has concluded that the producers do not meet criteria of a market economy.
Therefore, it is likely that Viet Nam leather shoes will be imposed a 130% anti-dumping tax, thus failing to compete with shoes from other countries.
Lawyer Truong Cong Dinh in Ho Chi Minh City, one of the lawyers for manufacturers in Viet Nam, said EC stated that the eight investigated companies meet three of five EC criteria.
|Que Bang Co. workers make leather shoes|
The criteria are business’ decisions for pricing, cost, market and investment; the accounting standards; not being influenced by the former planned economy; the Bankruptcy Law, the Property Law; and the foreign exchange rates.
Lawyer Dinh said, “But EC still looks at feedbacks from the companies before making a final decision. Therefore, the Vietnamese footwear industry needs to act promptly in this situation.”
Shoemakers in Viet Nam are concerning that they cannot sign export contracts with EU buyers for 2006 because of the high risk with EU imposing high anti-dumping on Viet Nam’s manufacturers.
Attempting to save the foodwear industry
Given the worry, Vietnamese companies should seek to find importers of non-leather shoes, said Nguyen Bao Tho, director of Saigon Leather and Shoe Export Import Co.
The Viet Nam Leather and Footwear Association (Lefaso) and the Vietnamese Ministry of Trade are working to save the industry. Lefaso will send its representatives to Europe in the next few weeks prove that Vietnamese companies do not dump their leather shoes on the EU market.
The association will also lobby EC before they finalize import tariffs against leather shoes from Viet Nam.
Analysts say EC would probably not finalize the duties until August 2006. In the remaining time, Vietnamese manufacturers need to prove that their production cost is close to the selling price in Europe.
Analysts also say it is advisable for the producers to ask EC to levy the eight probed companies’ average tariff on the whole industry.
According to Lefaso, one of the current challenges is that Vietnamese footwear enterprises only focus on production infrastructure and labor force and do not invest in designing or marketing strategies. In addition to production, enterprises must function as trading companies to introduce their own products to importers or foreign retailers.