EU Putting the boot into Vietnam

Something to ponder when you ponder the purchase of those new US$90 fancy trainers ... or why the COL index stays low.

From 25 April to 11 May, 2006, ActionAid Viet Nam and Viet Nam Leather and Footwear Association (LEFASO) visiteds 20 footwear companies in (HCM City, Binh Duong, Dong Nai, Hai Phong, Ha Noi, Hai Duong and Ha Tay) the north and south of Vietnam to study the consequences for employment if the EC anti-dumping duty on upper leather shoes is raised in September, as proposed.Sales to the EU from Vietnam have declined by 15-60% so far in 2006.Per capita GDP has increased from US$200 in 1990 to US$550 in 2004

The anti-dumping action was initiated in July last year after the EU announced that the volume of leather shoes imported from Viet Nam has increased by over 95 per cent since 2001. The EC said that the increased imports had seen local (EU) footwear production drop 30 per cent and 40,000 European workers lose their jobs. Footwear has been Vietbnam's biggest export to the EU with revenues of 2.1 billion euros in 2005.

EU importers have predictably switched production , not to EU manufacturing but toher 3rd world countries such as India, Sri Lanka and Bangladesh.The findings mirror exactly what has happened to Chinese exports to the EU (and US) after quotas were imposed on some of its clothing exports last year ... the result the industry lobbyists did not want - the law of unintended consequences bits back.

After an investigation last year into seven footwear manufacturers in Viet Nam, the EC decided to impose 4.28 per cent provisional anti-dumping tariffs on upper leather shoes from Viet Nam phased in over five months starting from April and can go up to this can go up to 16.8 per cent in the next six months..

AAV considers this anti-dumping case was an unfair trade practice which would negatively impact the livelihood of many workers in the footwear industry, of which around 85% are female.

"Due to a lack of orders, we now have only 20 working days per month instead of 26 days as normal, which means the income is much lower. With an income of 0.75 to 1 euro per day, we spend 0.25 euros on food, mainly cereals (rice, corn, sweet potato and cassava)," Dang Thi Nhien, representative of employees in Hai Phong Leather and Footwear Company.

"We now get a basic salary of 400,000 VND (20 euros) instead of 800,000-1,000,000 VND (40-50 euros) as normal while living costs are getting higher and higher. I have to pay 300,000VND (15 euros) for accommodation, which means only 100,000VND (5 euros) is left for food for the whole family for a month.

My two children and I are now really living from hand to mouth. I’ve been working for the company for more than ten years, I really don’t know what to do to save our lives if I become unemployed now".