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FONTE: vietnamnews.vnagency.com.vn
A European Committee delegation last month concluded a two-month investigation into the operations of eight local footwear companies, according to a statement made by the Ministry of Trade (MoT) and the Viet Nam Leather and Footwear Association (Lefaso) last Friday in Ha Noi.
The group’s preliminary findings suggest the companies in question were not operating in a manner conducive to conventional business practices of market economies.
The delegation arrived in Viet Nam in September to conduct a comprehensive investigation on the firms involved in the anti-dumping case, following a petition filed on July 7, 2005 by the European Confederation of Footwear Industries, whose members produce 40 per cent of the leather shoes sold in the EU.
The eight enterprises were selected by the EC from 115 local companies included four foreign-invested firms: Pou Yuen Viet Nam, Pou Chen Viet Nam, Taekwang Vina Industries and the Kainan Joint-Venture Company. Footwear Company No 32, Dona Bitis, Binh Tien Import Export Company, and Hai Phong Leather and Footwear Company were locally-owned firms also selected by the EC team.
Industry insiders say the EC’s preliminary ruling puts Viet Nam at risk of having an anti-dumping levy imposed, while an official announcement by the EC is expected next March.
Dinh Thi My Loan, director of the MoT’s Department of Competition Administration said criteria set by the EC to recognise the operation of a fair market economy business are concerned with five criteria: retail prices, costs and market investment; accounting systems; independence from subsidised economic regimes; equitable laws on assets and bankruptcy; and exchange rates.
According to the MoT, most of the companies concerned met minimum standards on only three of those five criteria.
Loan said that to minimise any adverse impact on the local footwear industry, the MoT would dispatch an official diplomatic note to the EC to request that the law-suit is conducted in a fair, unbiased way, and based on documents supplied by Vietnamese enterprises.
"About 80 per cent of shoe-makers in Viet Nam worked under sub-contract for international conglomerates in a third-party country to export to the EU, so they had no power to set retail prices for their products," said Nguyen Gia Thao, chairman of Lefaso.
Thao stressed that sale prices are closely related to sub-contract orders. He said the whole industry would make great efforts to demonstrate that Vietnamese companies did not dump the products on the European market.
In the event the preliminary decision is upheld, local firms, particularly small and medium-sized enterprises, face possible bankruptcy, said Deputy Chief of the HCM City Leather and Footwear Association, Diep Thanh Kiet.
Local business representatives said that most of their European partners were holding off on export contracts for next year, wanting to hear the final decision before they proceed.
The lawsuit has already impacted the industry’s export turnover, according to the Lefaso.
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