Despite the EC findings following its recent fact-finding tour of Vietnam, EC allegations that the Vietnamese Government provides subsidies for leather shoemakers are completely groundless. First of all, its investigations lasted nine weeks, focusing only on theoretical aspects. Three out of eight investigated shoemakers are State-owned, making up 37 percent – a rate which is much higher than the real level of State-owned enterprises involved in the footwear industry in Vietnam.

The EC alleged that the Vietnamese Government has provided preferences for its shoemakers including land rental and preferential loan access. A representative from the Ministry of Trade affirmed that these are normal incentives to encourage and attract foreign investment. He said not only Vietnam, but also many countries which are in a transitional period like Vietnam, and even developing EU countries, apply similar measures to attract foreign investment. 

According to the Vietnam Leather and Footwear Association, most Vietnamese shoemakers are sub-contractors for international corporations and there is no reason to say that Vietnamese shoemakers “are threatening” the leather shoe industry in EU countries.

Anti-dumping duties are one of the measures the World Trade Organisation (WTO) has taken to create equal competition for world economies. However, several powerful economies have made use of this measure to protect their domestic industry involved in similar products.

For foreign investors, Vietnam’s top advantages include low labour costs and low cost of living, therefore their production costs cannot be compared to other countries.

The EC came up with an arbitrary decision when comparing the sale prices of Vietnamese and Chinese shoes and those of Brazil because the quality of leather from these countries is different, and so are the average salaries calculated on a product unit.

In addition, the Vietnamese footwear industry has made great strides in recent times thanks to the application of scientific and technological advances. This is viewed as Vietnamese shoemakers’ effort to increase the competitiveness of their products.

It is unfair when a representative of the European Commission delegation to Vietnam said that the new duties will not badly affect Vietnam’s export of leather shoes to Europe. Shoes are one of Vietnam’s key export items as it attracts more than 1.5 million workers, with female workers making up 80 percent. In addition, the footwear industry also affects many other related industries. Therefore, the EC decision not only causes harm to the footwear industry but also affects the living conditions of millions of workers, as well as other social consequences in Vietnam.

Together with Vietnamese workers, European customers, importers and retailers are the first to suffer losses from the EC decision. According to EC calculations, with the new duties, shoe importers will have to pay an additional US$1.5 for a pair of shoes, but the EC could not calculate the total additional money EU consumers will have to pay.

In response to the EC decision, shoe importers and retailers from Germany, the UK and many other European countries said they do not support this decision as it only protects the local footwear industry in East and South Europe.

The EC plays a decisive role in proposing preliminary duties when considering anti-dumping suits against any country. EU nations are expected to discuss the new duties at a meeting on March 9. If approved, provisional measures could take effect on April 7 for six months while the EU continues its investigations. They could then be extended for five years if the situation does not improve.

A representative from the Ministry of Trade called on shoemakers to keep calm and brace for new competition. This is the 21^st lawsuit Vietnam has faced and the 10^th the EC has lodged against Vietnamese commodities. Experts have expressed concern that after leather shoes, many other commodities could face similar suits.