What do you think about the European Community’s decision?

We are very disappointed about the decision. Viet Nam fully explained why we felt the footwear sector should qualify for GSP, and explained what the economic and social consequences would be for Vietnamese footwear exporters if they could no longer enjoy GSP.

The decision will have a direct negative impact on Vietnamese labourers working in the footwear production and exporting sector, most of whom are women on low incomes.

The EC made its decision despite the anti-dumping tax that has already been imposed on Vietnamese leather shoes. Thus the economic consequences could be more serious.

The decision also harms the interests of EU enterprises co-operating with Vietnamese partners and EU consumers who are entitled to purchase high-quality products at reasonable prices.

What was the ministry’s reaction to the EC decision?

When we got wind of the EC’s intention and the commission’s reasons for making that decision, the ministry informed the Prime Minister and together with other ministries and representatives from the shoe-making sector tried to find a solution.

The [industry] minister sent letters to the EU trade commissioner and the economic ministers of the 27 EU member countries explaining that the EC’s decision was unreasonable and unfair, suggesting that the information and statistics on which its decision was based should be checked. We also informed the EU of the likely social impact on Viet Nam.

The Prime Minister and Chairman of the National Assembly sent letters to the chairmen of the EC and the European Parliament. Unfortunately, the EC went ahead with its decision.

What reasons did the EC give for scrapping GSP for Vietnamese footwear exporters?

The EU grants GSP to a single commodity of a developing country according to two criteria. Specifically, if over a three-year period, the GSP-covered imports of one commodity from one country average 15 per cent of all imports of the same commodity from all GSP beneficiaries to the EU then that sector is no longer deemed to need preferential treatment.

However, when the GSP-covered imports exceed the 15 per cent threshold but account for more than 50 per cent of the country’s total GSP exports to the EU – meaning that the country depends heavily on the sector – then the sector is still permitted to enjoy GSP.

Viet Nam and the EU accept that Viet Nam’s GSP-covered footwear imports exceed the 15 per cent threshold. But it seems unfair that the EU concluded that the GSP-imports into EU made up only 49.1 per cent of Viet Nam’s total GSP-exports to the region. We asked the EU to check the figures again but it refused. According to Vietnamese statistics, the figure is 62 per cent.

Why did the ministry say that the commission had made a miscalculation?

First, other countries were considered under normal trade conditions while Viet Nam has had an anti-dumping tax imposed on its leather shoe exports which limits its exports to the EU.

Second, when calculating Viet Nam’s total GSP-covered exports to the EU, the EU included commodities that are not subjected to GSP. Thus the country’s total exports to the EU enjoying GSP increased, while the percentage of GSP-covered footwear exported to the EU actually decreased.

Third, the three-year observation should only be applied to calculate the 15 per cent threshold, not the 50 per cent threshold. During the three years from 2005 to 2007, the percentage of GSP-covered footwear exports to the EU out of the total exports to the EU enjoying GSP was over 50 per cent for those years with the exception of 2006 when the percentage was lower due to the anti-dumping tariff. This made the average figure for the three-year period just 49.1 per cent. — VNS

(24-06-2008)

Source: vietnamnews.vnagency.com.vn