Anti-dumping duties on Vietnam’s shoes lifted, but worries exist

Vietnamese shoes makers now have the opportunities to come back to the EU market, since the anti-dumping duties have been left. However, they still cannot breathe a sigh with relief because big difficulties are still ahead.

In the past, the EU market consumed up to 70 percent of total shoe exports of Vietnam, while the proportion has decreased to 45 percent. This means that the EU is always a big market for Vietnamese shoe makers.

However, the shoe makers are reconsidering their export strategy, thinking about if they should continue relying on the EU as the biggest market.

Diep Thanh Kiet, Deputy Chair of the Vietnam Leather and Shoes Association (Lefaso), believes that it would be better for Vietnamese enterprises to diversify the export markets instead of focusing on the EU market, even though the EU has listed the anti-dumping duties on Vietnam made leather capped shoes.

Vietnam is not the only maker enjoying benefits from the EU’s decision, because the EU has decided to lift the anti-dumping duties on Chinese products as well. This means that in the near future, Vietnamese products will have to compete fiercely with Chinese ones in the EU market.

Also, though the anti-dumping duties have been removed, Vietnam is still put under the EU’s monitoring for one year. During that time, if the exports of the products which once imposed the anti-dumping duties saw sharp increases, or the average products’ prices decrease, the duty imposition would be resumed.

If so, the EU will have full powers to impose higher duties for longer time while it does not have to conduct any investigation.

Vu Ba Phu, Deputy Head of the Competition Administration Department (CAD), an arm of the Ministry of Industry and Trade, has advised enterprises not to gather all strength on only one market, the EU, and that they should consider penetrating other potential markets such as Japan, South Korea or North America.

China, the shoe maker who has the same conditions as Vietnam, has also pushed up its supervision over the exports, to be sure that the exports to the market will not increase too sharply. Therefore, experts have warned that in the time to come, enterprises may try to export products to the EU through third countries, including Vietnam.

Tran Van Tac, Director of Tuan Viet Shoes Company, said that shoe makers will have to compete with a lot of rivals in the near future, not only the ones from China. Therefore, Tuan said that enterprises need the support from Lefaso when they have to gather strength and spend most of their time on the production to create the products with more reasonable prices.

Kiet believes that Vietnamese shoe makers should quickly shift from making low cost products to making medium class products and high grade products. In fact, the new business strategy has been applied by many Vietnamese enterprises already.

According to Phu, European consumers always class the products from Asian countries (Vietnam, China, Indonesia, and Thailand) as having the same quality and characteristics. Therefore, when thinking of applying safeguard measures, the EU always conducts investigations on all the regional countries at the same time.

Therefore, Phu said, instead of trying to obtain big orders, Vietnam should strive for the orders for the products with high values. Besides, they should create differentiations among different products, and associate the products with the commitments in environment protection, social responsibility and intellectual property.

In the first 8 months of 2011, Vietnam exported 4.21 billion dollar worth of footwear products, an increase of 20 percent over the same period of the last year. 45 percent of exports went to the EU, 29.3 percent to the US, 4.1 percent to Japan, and 21.6 percent to other markets.

Doanh Nhan Saigon

Tags: Vietnam Shoe exports