Tải bản đầy đủ - 83trang
The subject countrys arguments
Index: 2001=100 100
Source: The Journal of the European Union
The average unit sales price continuously declined during the period considered. The decrease was of 7,2. The analysis of the situation of the
sampled companies revealed that, during the IP, they were not able to further decrease their prices levels without incurring losses.
Table 11. Cash flow, profitability and return on investments
IP Cash flow EUR
000 13 497
10 991 8 147
10 754 5 706
Profit on net turnover 1,6
Return on investments
Source: The Journal of the European Union
The cash flow was especially affected. It declined by almost 60 between 2001 and the IP. The profitability level in relation to turnover
remained relatively stable at a level of 1,5 between 2001 and 2004, with the exception of the year 2003, but then dropped to a break-even level during the
IP. The return on investments followed the same trend.
2.4. The subject countrys arguments
Le Thanh Hai - A4 - BBE - K41 52
Eight footwear companies in Vietnam have been selected to be samples for exporting producers in Vietnam:
- Pou Yuen Vietnam Enterprise Ltd, Yuen Yuen.
- Pou Chen Vietnam Enterprise Ltd, Yuen Yuen.
- Taekwang Vina Industrial Co. Ltd.
- Haiphong Leather Products and Footwear Company.
- Company No 32
- Dona Bitis IMEX Corp. Pte. Ltd.
- Binh Tien Imex Corp. Pte. Ltd.
- Kai Nan Joint Venture Co. Ltd.
According to Mr. Nguyen Duc Thuan, Vice President of Vietnam Leather and Footwear Association, 60 enterprises selected by the petitioner
are small and medium enterprises; they do not have well organized operation. As a result, their ability to be given market-economy treatment by the EU is
not high. These 60 enterprises are not representatives and do not show the size of the Vietnamese footwear industry. We have more than 200 enterprises,
among which are big ones with large scale production; however, they are not selected as samples for Vietnamese footwear exporters.
Le Thanh Hai - A4 - BBE - K41 53
2.4.1. Market-economy treatment
Vietnamese leather shoe manufacturers are functioning according to the rules of the market economy and they are enjoying free trade and fair
competition, said Foreign Ministry spokesman Le Dung in Hanoi. The Vietnamese government does not intervene and does not subsidize business
activities of enterprises. The comparative advantages of Vietnam enterprises are low labor costs and modern technology imported from Europe.
According to statistics data, more than 70 among big export enterprises are joint-stock and 100 foreign-invested ones which the Vietnamese
government cannot intervene in the business.
The SOEs reform program in accordance with World Bank guidelines had reduced a large number of SOEs and most SOEs had to do business
themselves and operate according to commercial principles. Vietnamese government can not interfere in setting 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.
Laura Atlee, lawyer on behalf of the Lefaso members, pointed out that it was unreasonable to jump to the conclusion that the firms inspected could not
comply with the majority of the criteria concerning business operation costs. Regarding the criterion on business operations, Laura rejected the EC
argument that Vietnam exporters did not have the 80 export rate as regulated by Vietnams Investment Law to receive subsidy. She interpreted the EC
argument as being out of line with two decrees issued by the Vietnamese Government on Foreign Investment in Vietnam. The first decree
Le Thanh Hai - A4 - BBE - K41 54
No.242000ND-CP stipulates that investors have the right to choose investment projects, investment partners, place, time, market and ratio of share
contribution in accordance with the investment law and the decree itself. Another decree No.272003ND-CP is to provide companies with two levels
of incentives. Accordingly, companies either exporting 80 of their products or employing over 5000 workers may receive preferential tax treatment.
According to Director of the Trade Ministry Competition Administration Department, Dinh Thi My Loan, Vietnam is a transitional economy in which
attracting investment play a vital role in economic development. Land cost reductions one of the EUs accusations against Vietnam, if any, are a form of
export incentives. This is a common tool in economic policies which is preferred by market economies, including the EU. Therefore, it can not be
seen as a distortion of production cost as concluded by the EU.
The Vietnamese government continued to lift price controls. Energy, water, and other factors of production were available at rates largely
determined by supply and demand. The government fixed prices only in natural monopolies and regulated prices in other products such as gasoline,
metals, cements, and paper, and these prices were often adjusted to reflect costs. The government had never controlled the price, allocation and output
decision of enterprises as in other communist countries.
Vietnam’s labor code confirmed the principle of free bargaining between workers and employers at or above the minimum wage and guarantees labor
mobility. Foreign invested enterprises hired labor directly with freely bargained wages.
Le Thanh Hai - A4 - BBE - K41 55
Concerning the criterion on accounting and auditing norms, the EC argued that such standard applied in Vietnamese enterprises did not follow
international norms. Laura claimed that EC inspectors did not completely understand Vietnams accounting and auditing norms, along with the Land
Law and Vietnams Law on Foreign Investment. Lefaso described the claim as groundless since the countrys norm, in fact, complied with those set by the
International Federation of Accountants - as Vietnam is an acting member.
2.4.2. Level of ‘injury’ to EU producers
According to Department of Trade Promotion, Ministry of Trade, among 30 of Vietnamese leather footwear producers, 70 produce and export
footwear to the EU market in the form of pre-production with low benefit. More than 95 of Vietnamese footwear exported to the EU are bearing the
name of clients such as Nike, Adidas, ... or trademarks of retail corporations like Famous Footwear, K, Shoes... provided by foreign partners. This is a
popular type of production cooperation between foreign clients and Vietnam enterprises. Therefore, it is groundless to say that Vietnam is dumping as more
than 80 of Vietnams footwear enterprises are sub-contractors for foreign firms that manufacture products for such global names as Clark, Nine West,
Gabor, Camel and Siebel. Almost all Vietnamese shoemakers cannot impose prices for exports to the EU market.
Some directed exporters have small scale of production and low productivity, so they are not ably to harm or threaten to harm the footwear
industry of EU.
Le Thanh Hai - A4 - BBE - K41 56
In accordance with the assessment of the EU, the needs for footwear of the EU market is 2.5 billion pairs, in which leather footwear accounted for
35. The imported amount from China is 1.25 billion pairs, accounting for 50 of the total import needs of the EU market. Meanwhile, import quantity
of Vietnam is 269 million pieces, making up 11 of the total import needs of
the EU market.
Table 12. 10 biggest footwear exporters into the EU market
1000 Euro 2005
1000 Euro 01-052006
4,730,143 1,259,482,144 2,323,242
Source: Statistics of the European Customs
Le Thanh Hai - A4 - BBE - K41 57
Imports of leather shoes from China soared 450 percent from 2004 to 2005 and by 1,000 percent from 2001 to 2005. Vietnamese imports fell by 1
percent from 2004 to 2005, mainly due to sharper competition with China, but grew 95 percent from 2001 to 2005. Therefore, the increase of Vietnamese
exports to the EU market is not significant in comparison with China. According to many economists, Vietnamese export would do no harm to the
In 2005, the number of Chinese shoes under anti-dumping investigation was 206 million pieces, accounting for 16.5 of the total exported amount.
While the number of Vietnamese shoes under investigation was 119 million pieces, accounting for 45 of the total exported amount. This number showed
the huge differences in quantity exported from Vietnam and China to the EU. In terms of quantity, Vietnam exports are 4.8 times less than China, but
investigated ratio is 2 times more than China.
In terms of price, during the period of 2001-2005, the export price of China and Vietnam decreased 31 and 20 respectively. Although the
average selling prices declined, Vietnamese ones are still lower than the Chinese ones in terms of examining each commodity. For instance, code 642
219, Vietnams price is Chineses price is which is 2.6 times lower than Vietnams. Code 640 299, Vietnams price is 2.82 times higher than Chinas.
Le Thanh Hai - A4 - BBE - K41 58
Table 13. Comparison between unit prices of certain leather commodities from China and Vietnam.
Vietnam 640 192
640 219 17,033,578
8,4 640 291
640 299 277,638,818
5,45 640 399
640 411 23,988,298
8,47 640 419
640 420 2,914,992
6,76 640 590
1,29 Source: Statistics of the European Customs
The estimated margin of dumping of Vietnam is 130, China is 400. If Vietnamese uppers leather footwear were imposed 16.8 duties, Chinese
products must be imposed 40 duties.
The Federation of European Sporting Goods Industries FESI also concerned that the proposed duties are considerably higher than under the
Le Thanh Hai - A4 - BBE - K41 59
previous proposal, especially in the case of Vietnam. This runs counter to any development policy logic: Vietnam, which saw its exports to the EU decline
Eurostat figures show a 57.4 percent jump in Chinese exports into the 25 EU countries between 2004 and 2005. In an odd twist, Vietnams exports actually
fell 9.9 percent and prices rise in 2005, will be capped to a lower export level and face substantially higher duties than China.
2.4.3. Inappropriate choice of surrogate country
The EC chose Brazil to be the reference market for Vietnamese-made shoes. Vietnam completely opposed to this decision. Brazil does not possess
similarities to Vietnam in terms of socio-economic and culture developments, or per capita GNP, labor cost and condition to access to raw material. The
average GDP of Brazil is 3,320 USD per capita, while the number of Vietnam is 500 USD per capita. Vietnam has a per capita income a third of Brazils
consequently, the average manual labor cost per hour of the Brazilian footwear industry is US1.45 per person, much higher than that of Vietnam,
which is at US0.35 per person, so the range of salary paid by Brazilian enterprises is much higher than Vietnam. Moreover, salary structure in Brazil
is completely different from the Asian countries.
On the basis of the World Banks main criteria for classifying is gross nation income per capita, Brazil is classified in the same category as China,
Thailand and Indonesia, not Vietnam.
Vietnam has to import cow leather and does not have the same access to raw materials as Brazil which has large and well established production of raw
leather. Brazil has one of the largest commercial bovine herds of the worlds as
Le Thanh Hai - A4 - BBE - K41 60
well as hundreds of companies specialized in tanning and leather finished. The Brazilian tanning industry producers, annually, more than 30 million hides, of
which is absorbed by the Brazilian leather consuming market. Such know-how in terms of processing and availability of raw material can only have
downward effect on the Brazilian cost of production. The investigation of the Vietnamese exporting producers showed that the quality of the leather used by
Vietnamese producers was higher than that used by Brazilian ones. It would cause the production cost of Vietnamese products higher than the Brazilian
ones. Thus, why Vietnam has to dump their products at a lower price than Brazil?
2.4.4. Effects on interest of the Community
With EC’s high anti-dumping tariff, the price of one pair of shoes exported from Vietnam to EU will increase by EUR 1,5-2. This will affect not
only Vietnamese workers as well as EU consumers, EU footwear retail industry, and many EU footwear investors who are doing business in Vietnam.
Other supporting industries and services of Vietnam and EU countries will also suffer from this tariff.
Protectionism is against whom? The EU consumers. If the duties come into effect, they have to pay higher prices and measures would result in a
reduced choice of footwear. the re-inclusion of children shoes which was first exempted to avoid
forcing up prices for poor families is a dangerous step back into protectionism and will hurt Europes poorer families with children most.
Le Thanh Hai - A4 - BBE - K41 61
Northern European countries, the British and Germany strongly opposed the proposal of anti-dumping duties application on uppers leather footwear. In
their opinion, this proposal is too strict and is a UN expected barrier to retail activities in these countries. It is clearly a form of protectionism, said a
member of the British Conservative Party in European Parliament.
Much of the European shoe industry has also voiced concerns and concluded that the EU investigation was biased from the start. Some critics of
the EUs anti-dumping policy, led by the Footwear Association of Importers and Retail chains argue that the EU is overlooking the thousands of European
jobs in the distribution network of major manufacturers. With much of their production already based in East Asia, some of the biggest names in the
sportswear industry including Adidas, Puma, and Rebook feared such penalties could damage a European market worth around US48 billion a
year. The Federation of the European Sporting Goods Industry, which represents many major brands, argued consumers face higher prices, and jobs
could be lost in an industry which employs about 650,000 people in Europe. Britains Clarks is one of the shoe companies likely to be hit badly by the anti-
dumping actions since 60 of its products are made in Vietnam
The investigation continues to cover many other sports shoes that are not produced in Europe and which pose no threat to European shoe makers,
only the threat to lost jobs in the retail sector and higher prices for Europes consumers. These measures are against the interests of the European
economy, said FESI president Horst Widmann.
Kevin Hawkins, Director General of the British Retail Consortium, said: The Commission is caving in to the pleadings of uncompetitive European
Le Thanh Hai - A4 - BBE - K41 62
producers who are clearly favors over low income families and retail workers. Yet this substantial and damaging new tax will do nothing to create or reserve
a single job in European shoe production. Manufactures here do not make the low cost shoes China and Vietnam produce. All duties will do is wipe out any
profit margin made on leather shoe sales, forcing retailers to either raise prices or cut costs by axing jobs. There is no evidence that duties increase sales for
European manufacturers. There will be no long-term winners from this latest blow to the free trade principles the EU says it supports.