Vietnam state subsidies in shoe firms must end
HANOI - Vietnam should stop state subsidies to help shoes makers avoid punitive anti-dumping duties on leather shoes exports to EU markets that have been announced by the European Commission, an EC official said on Friday.
Christoph Wiesner, acting head of the EC delegation to Vietnam, said an EC probe found Vietnam has extended soft loans, lower land rent and tax incentives to shoes manufacturers.
"I mean either an end to the kind of state interventions which I've numerated or alternatively a pricing arrangement which ensures these are no longer relevant in terms of the final import price," he told a news conference in Hanoi.
On Thursday, the EC said it would impose duties of up to 19.4 percent and 16.8 percent for imports of Chinese and Vietnamese leather shoes which it said were being dumped in Europe as manufacturers benefited from state intervention.
Hanoi has rejected the EC findings, saying it did not dump shoes. Industry officials said many Vietnamese firms make shoes under contract to major brands such as Adidas , its subsidiary Reebok and Nike so they cannot decide the material cost or the selling prices.
The EC findings were taken from probes into eight Vietnamese shoemakers representing about 120 companies in the country's footwear industry. Vietnam exported 265 million pairs of shoes to Europe last year, up 95 percent from 2001, the EC said.
The anti-dumping duties on Vietnamese leather shoes will be phased in over a six-month period leading to 16.8 percent in September from around 4 percent in early April, Wiesner said.
European consumers would therefore have to pay around 1.5 euro more to the wholesale prices of 8.5 euro for leather shoes which are retailed now at between 35 to 120 euro.
But Wiesner said only 30 percent of Vietnamese shoe exports to the EU would be hit by the duties, while the 16.8 percent duty for Vietnamese shoes would still give the country a competitive edge over China.
He said the EC was open to dialogue and an EC mission was scheduled to arrive in Vietnam in early March to discuss the issue with the government.
"The impact of this case on overall trade relations will be limited," Wiesner said.
Vietnam has projected its footwear exports to all markets will rise 17 percent to 23 percent to $3.5-$3.7 billion this year from $3 billion last year. The EU accounted for $2 billion of that amount.
Reuters - February 24, 2006.
Vietnam denies dumping shoes on market
HANOI - Vietnam on Thursday strongly denied charges that it has unfairly dumped leather shoes on the European market and called for a "fair decision" on tariffs.
"Vietnamese leather shoe manufacturers are functioning according to the rules of the market economy and they are enjoying free and fair competition," said Foreign Ministry spokesman Le Dung ahead of an expected announcement by the EU to propose protective tariffs against shoe imports. "The Vietnamese government does not intervene and does not subsidize business activities of enterprises."
Earlier this week, the EU said a nine-month probe it conducted into the market found evidence of state support to the footwear industry in China and Vietnam including cheap finance, non-market land rents, tax breaks and improper asset evaluation.
Dung called for "an objective and fair decision" and urged the EU to consider the negative impact of tariffs that affect Vietnamese laborers as well as European consumers.
EU nations were expected to discuss the possible countermeasures at a meeting March 9. If approved, provisional measures could be come into force on April 7 for six months while the EU continues its investigations.
This week, the EU said its imports of leather shoes from China soared 320 percent in the 12 months up to March 2005 to 950 million pairs. Vietnamese imports grew 700 percent to 120 million over the same period, the EU said.
European Trade Commissioner Peter Mandelson is expected to recommend tariffs of up to 20 percent on shoe imports in Brussels later Thursday. European shoe manufacturers have pushed for protective measures, but retailers and importers have warned that it will push up prices on the street.
Dung said Thursday that Vietnamese companies have "actively cooperated" with the EU during the investigation period.
Aware of the EU's impending decision, Prime Minister Phan Van Khai recently sent a special envoy to visit EU member nations to plead Vietnam's case. Hanoi has already gotten support from some countries such as Denmark, which has publicly criticized the possibility of punitive tariffs.
"We hope the European Commission, before issuing their final decision, will carefully deliberate so as not to adversely impact" Vietnamese workers, many of them women, European consumers, European retailers and other EU shoe companies doing business in Vietnam, Dung said.
The Associated Press - February 23, 2006.
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