Mexico Mulls over Compensation Tax on Vietnamese Shoes

The Leather Shoes Industrial Office of Guana State (CICEG) has asked the Economic Ministry of Mexico to force Vietnamese exporters to pay a minimum compensation tax of 135 per cent varying with each specific leather footwear item exported to the Mexican market, the same as Chinese exporters, state media said.

 

The move is a reaction against increasing cheap imports from Asia.   

 

Guana state accounts for 65 per cent of Mexico’s total leather shoes volume. CICEG also plans to sue Vietnamese companies for dumping their products on the Mexican market. However, Mexican importers protest against the plan as most of the products they import from Vietnam are sports shoes, so that they do not impact on the leather footwear industry of Mexico.

 

A Mexican newspaper said on May 2 that Vietnamese footwear exports to Mexico have increased by 132 per cent in recent years, from 6.8 million pairs in 2003 to 15.8 million pairs in 2005 at the low price of US$5-8/pair while respective increases for Brazil and China were from 10.3 million pairs to 11.7 million pairs and from 453,000 pairs to 1.8 million pairs in the same period.

 

Currently, most of Vietnam’s exports to the foreign market are through large companies from the US and South Korea.

 

According to the ministry, bilateral trade between Vietnam and Mexico was around US$200 million last year, up 15 per cent on-year.

 

The European Commission (EC) on March 23 in Brussels (Belgium) officially ratified the EU Trade Commissioner Peter Mandelson’s proposal to impose anti-dumping tariffs on leather shoes, excluding sporting shoes and children’s shoes, imported from Vietnam. The initial tax rate is 4.2 per cent as of April, and then gradually increases to 16.8 per cent after five months.