Vietnam faces dilemma over EU duties
BANGKOK - When Gao Hucheng, China’s vice minister of commerce, travelled to Brussels last month to fight proposed anti-dumping duties on Chinese-made leather shoes, he criticised the European Union’s rationale for the duties as “severely flawed” and warned that Beijing would take the dispute to the World Trade Organisation.
But on a later trip to lobby against the same EU anti-dumping duties against Vietnamese-made footwear, Le Van Bang, Vietnam’s vice minister for foreign affairs, took a far softer approach.
Instead of threats, Mr Bang made emotional appeals to Brussels, and European capitals, to have sympathy for Vietnam’s 500,000 shoe workers, and for Hanoi’s efforts to promote economic development and lift its people out of poverty.
Complicating Hanoi’s effort to express its frustration with the proposed duties on its third largest export industry was the awkward fact that the EU is one of Vietnam’s major aid donors, with a commitment to provide €162m ($193m) in aid over five years.
Hanoi’s dilemma over how best to combat EU anti-dumping duties on its shoes reflects what has been a tough challenge for this fast-growing but still poor south-east Asian country: how to protect its successful export industries from punitive duties.
In recent years, Hanoi has confronted US anti-dumping investigations into its catfish and prawn exports, while the EU probed its production of disposable cigarette lighters, bicycles, and now its shoes. Some fear the US will soon instigate anti-dumping proceedings on Vietnamese-made furniture too.
The first anti-dumping case – the US probe into catfish – prompted dismay in Hanoi, which filled the state controlled media with articles about its former enemy making a new assault on the Vietnamese economy.
Since then, Hanoi has grown more sophisticated about confronting such threats, occasionally mobilising resources from its local industry to hire expensive law firms to wage legal battles.
Still, Horst Widmann, vice president of Puma, said Hanoi’s efforts in the shoe case were too little, and yielded few results.
Vietnam has far less leverage in Europe than China, which is able to mobilise powerful allies, like European retailers, to its cause.
Vietnam also has little recourse if it is unhappy with the outcome of anti-dumping probes. With its efforts to gain admission to the WTO yet to be successful, it remains at the mercy of its more powerful trading partners.
By Amy Kazmin - The Financial Times - February 22, 2006.
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