The European Union (EU) is to remove preferential tariffs on Vietnamese footwear imports after deciding they no longer meet the necessary conditions to benefit from the scheme.

The proposal to end the Generalised System of Preferences (GSP) trade arrangement comes two years after the EU imposed anti-dumping duties on Vietnamese leather shoes and was today (13 June) described by a sporting goods industry group as "a kick in the teeth."

Horst Widmann, president of the Federation of the European Sporting Goods Industry (FESI) whose members include Adidas, Asics, Nike and Puma, said: "This decision is indefensible."

"It represents a kick in the teeth for both the Vietnamese footwear industry and the modern European footwear industry, which relies on Vietnam as a competitive source of supply."

The GSP scheme allows developing countries to export products at reduced rates of duty into the EU. But Vietnam is now deemed to have become too successful to qualify for this rating.

Instead, Vietnamese footwear will be reclassified to Most Favoured Nations status, with tariffs rising from 3-5% to between 5% and 10%.

FESI believes the 10% anti-dumping duties imposed in 2006 have led to a 23% drop in exports of leather shoes from Vietnam to the EU.

And it says the real irony is that this artificial decline led the EU to conclude that the Vietnamese economy is now less dependent on footwear exports than in the past - thereby justifying the abolition of GSP preferences.

"Vietnam is getting a double punishment," Widmann said. "Removing preferences after imposing anti-dumping duties is irresponsible. Graduation in this case is not a success story, but a disaster."

Vietnam, the second most important EU source for footwear following China, is one of the poorest countries in the world.

The country's footwear industry employs more than half a million workers, most of them women. Footwear is its third largest export sector, and the EU is its leading customer.