Pathway to EU for shoe-makers to walk

The path has been laid out for Vietnam’s footwear exports to walk into the European Union, but obstacles remain ahead.

“From April 1, 2011, leather-upper shoes from Vietnam exported to the European Union (EU) market will no longer suffer an anti-dumping tariff of 10 per cent, which lasted for four years. However, during the next years there are still potential risks for the Vietnam leather-upper shoes sector,” said Nguyen Thi Tong, general secretary of Vietnam Leather and Footwear Association (Lefaso).

She said although the EU had removed the anti-dumping tariff from Vietnam leather-upper shoes since April 1, 2011, the EU would monitor leather-upper shoes exports to EU for one year. If the EU finds that imports from Vietnam greatly increase, while export prices decrease, the EU might consider the re-imposition of the tariff.

“This is the largest threat for Vietnam’s shoes exporters in the coming time,” said Vu Ba Phu, deputy director of the Ministry of Industry and Trade’s Vietnam Competition Authority.

Previously, EU delegation to Vietnam counsellor Jean Jacques Bouflet said Vietnam’s EU market share for shoes had slipped from 9 to 6.6 per cent during 2004 to 2008 because of anti-dumping duties. But, the Chinese had actually managed to boost their share from 12 to 21 per cent during that period, despite being with a 16.5 per cent tariff.

The EU only accounted for 40 per cent of Vietnam’s footwear exports this year compared with 70 per cent in previous years, said Lefaso.

Claudi Dordi, an expert from EU-Vietnam Multrap III project, advised local firms to keep their composure and find new importers outside the EU and encourage local firms to concentrate on deals for high-quality and high-value products to avoid constantly increasing shipment volumes.

“If Vietnamese firms focus on low quality and price, they will not be able to catch other countries in the region, especially China,” said Tong.

Dordi said Free Trade Agreement (FTA) partners with the EU, such as Vietnam, would enjoy advantages over rivals.

Le Manh Hoach, deputy general director of Pacific Company – which saw 70 per cent of its footwear exports going to the EU, said the scrapping of the anti-dumping duty was good news for exporters and levelled the playing field between India, Bangladesh, Thailand and Cambodia.

“Vietnam strongly depends on imported raw materials, it only met about 50 per cent of raw materials for this sector. Besides, increasing oil and power prices as well as the devaluation of the Vietnamese dong against the US dollar and high lending interest rates are putting more pressure on businesses,” said Hoach.

Vietnam’s footwear exports last year reached $5.2 billion, up more than 14 per cent year-on-year. This figure is expected to reach $5.5 billion in 2011, up 6 per cent against 2010 – VIR

Tags: Vietnam Shoemakers