Feature: EU anti-dumping duties deal blow to Vietnamese footwear industry

Cleaning sweat on her gaunt face, Nguyen Thi Luyen hurriedly cycled to a street-side market in Da Nang street, where she sells vegetables after finishing work in a footwear plant in northern Hai Phong City.

The 32-year-old worker from the Hai Phong Leather and Footwear Company has to do the extra job since her salary dropped due to impacts of anti-dumping tariffs levied by the European Union (EU). The block has recently imposed provisional anti-dumping duties on Vietnamese leather-upper shoes which are phased in over a period of six months beginning at 4.2 percent on April 7, and finally reaching 16.8 percent.

"Due to fewer orders, our monthly salary decreased to only 400, 000 Vietnamese dong (VND) (25.2 U.S. dollars) from nearly one million VND (62.9 dollars). Many of us have to do an extra job to have enough money for living," Luyen lamented, saying it would be more difficult for her, the breadwinner of a four-member family.

Luyen, despite getting low salary, is luckier than nearly 1,000 other employees in the company who have to lead unstable lives due to losing jobs since the EU started its anti-dumping investigation into leather-upper shoes produced in Vietnam last year. "I dare not think of getting unemployed. If it happens, we don't know how to live," she said, echoing the fears of many workers.

However, the worst thing may happen to her and her colleagues at any time when the provisional anti-dumping duties reach final level in October, resulting in fewer orders to the company, which sells 90 percent of its products to the EU.

"We received orders due for delivery by September. We don't know what will be after the month," the company vice director Duong Thi Gai told Xinhua on Tuesday.

Due to order reduction, the company's output declined by 17 percent in 2005 over 2004, she said, adding that the anti-dumping duties have also made her employees feel insecure. "Many of them are seeking other jobs, affecting our production."

Gai's company is one of many local enterprises which are facing difficulties caused by the anti-dumping tariffs. According to a recent survey by the non-governmental organization ActionAid Vietnam and the Vietnam Leather and Footwear Association (Lefaso), the anti-dumping case has caused a severe impact in leather-upper shoe production in the country, with orders falling by 20-50 percent on-year in the first three months of this year.

The survey conducted in 21 footwear firms in seven northern and southern localities of Vietnam also showed that the anti-dumping tariffs have put half a million of direct workers in the local footwear industry and a large number of employees in related industries in the danger of losing jobs.

Such impacts are even more serious as income of footwear workers is low and each worker must support 2-3 members of their families, the ActionAid Vietnam said, noting that when the workers face the risk of unemployment, it will result in many other social problems such as no future for young workers, no money for their children to go to school and financial difficulties for their families.

To overcome the difficulties, many footwear firms in Vietnam are seeking new markets and changing their production structure. "We will promote export to Asia and the United States. We may also study to produce other items," Gai said.

The Action AidVietnam and the Lefaso have appealed the European Commission to reconsider its decision on imposition of the provisional anti-dumping duties.

"A decision of the provisional anti-dumping duties that could not change the weak operation of EU producers but entirely make hundreds of thousands of Vietnamese workers unemployed is unacceptable," said Phan Van Ngoc, country director of the Action Aid Vietnam.

Vietnam, the fourth largest footwear exporter to the EU, behind China, China's Hong Kong and Italy, earned 2.1 billion euros (over 2.6 billion dollars) from exporting the products to the block, according to the Lefaso.

Almost Vietnamese footwear makers do not set prices for their products exported to the EU, as more than 80 percent of them are sub-contractors for foreign firms with famous brands as Clark, Nine West, Gabor, Camel and Siebel, said Lefaso.

Source: Xinhua