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Shoe industry gears up as EU dumps levy
Viet Nam's leather-capped shoes industry aims to boost exports by US$400 million this year following the lifting of the European anti-dumping tariff in a few days.
The EU's October-2006 anti-dumping tariff on leather-upper shoes from both Viet Nam and China will automatically expire on April 1. While it's good news for Vietnamese shoemakers, it also opens them up to more competition from China.
The tariff had been reviewed in 2008 but the European Commission decided to continue it in both countries, saying they had continued to dump shoes on the market. Some EU members split on the decision concerning Viet Nam.
Leather-capped shoe export revenues here were expected to reach $5.6 billion, up from $5.2 billion last year, said Thoi Bao Kinh Te Viet Nam (Vietnam Economic Times).
Leather-upper shoes have accounted for only 10 per cent of Viet Nam's total export volume to the EU, since the antidumping tariff caused the export revenues to drop 47 per cent, according to Ministry of Industry and Trade (MoIT) statistics.
More than half of Viet Nam's leather and footwear producers had to cut production because of the EU's decision, with many switching to low-value products or letting themselve be out-sourced by domestic brands.
By 2009 the market share of Vietnamese shoes in the Europe had dropped to 10 per cent, from 15 per cent in 2005.
The lifting of the anti-dumping tariff on Vietnamese leather and footwear products would give European consumers more choices and open better access to the 27-nation market for the Vietnamese exporters, the Ministry said.
The Viet Nam Leather and Footwear Association (Lefaso) said the April 1 lifting would see international importers, who had been forced to go elsewhere because of the duty, send their business back to Viet Nam.
Since the antidumping measure was put in place, the Chinese manufacturers had a disadvantage of a bigger16.5 per cent duty. That advantage for Vietnamese manufacturers would end from April 1 and competition will be fierce, said Deputy Head of the MoIT's Department of Industry and Trade Management Vu Ba Phu, referring to Chinese products.
Footwear made in Viet Namhas already faced increasing competition in prices from Chinese products. China now is the biggest exporter of footwear to the EU, followed by Viet Nam and India.
The lifting, however, will see the European Commission better scrutinising the quantity of Vietnamese products to their market, according to Phu.
Phu warned the EU would again impose the anti-dumping tariff on Vietnamese products if they see a surge in the exports volume.
Vietnamese leather and footwear products, however, are becoming more popular in international markets, including European and US, for their quality.
Vietnamese exporters should focus on high-value contracts and manage the growth of their exports, Phu suggested.
"The Viet Nam shoemakers' association plays an important role in the management and control of the quantity of leather and footwear product exports to the EU," said Phu, adding that the association should uphold its key role.
Phu warned that amid the increase of trade barriers and domestic production protection of importing countries on Vietnamese leather and footwear products, Vietnamese producers should focus on high quality and improving their trademarks.
The labour cost, which was an advantage for Viet Nam's leather and footwear industry, was increasing and this was another reason for Vietnamese enterprises to concentrate on exporting fine and high-value products rather than cheap versions.
"Their concerns should be over the quality, not the quantity," said Phu.
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