EU could reconsider duties on Vietnam

24 July 2006

The European Union could reconsider the anti-dumping system currently in place against shoes imported from Vietnam and China because of the effect the system is having on European companies. EU manufacturers and retailers that produce in Asia have claimed that the EU duties are affecting their business. The duties began at 4.2% in April but increased in June to as much as 16.8%. The Vietnam leather and footwear association (Lefaso) claims that up to 90,000 Vietnamese workers could lose their jobs. EU commissioner Peter Mandelson told the UK's Financial Times that changes could be made by the end of the year. These would have to be approved by fellow commissioners and then the majority of member states. Mandelson had already announced in May that the EU was in talks with Vietnam about alternatives to long-term dumping duties on leather shoe imports. Vietnam had proposed 'deferred tariffs' which means that quotas would limit the amount of exports for a period of time before anti-dumping duties came into force. Workers' average monthly incomes have already dropped from 1.2 million Vietnamese dong (US$81.8) to VND 1 million (US$62.9), according to recent research conducted by the NGO Action Aid Vietnam in coordination with the Vietnam Leather and Footwear Association. The majority of shoes manufactured in Vietnam are produced under outsourcing contracts signed between footwear makers in Vietnam and their foreign partners. Vietnam exported 265 million pairs of shoes to the EU last year. Some 80 million pairs will be affected by new tariffs, according to a recent EC press release.

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