Because of the preferential tariffs beneath the EU-Vietnam Free Commerce Settlement, footwear exports to the bloc’s 27 member international locations elevated by 19.2% year-on-year within the first quarter of 2021.
General exports, primarily of aquatic merchandise, textile-garment, footwear, and farm produce, have been price practically US$4.8 billion.
The importing markets have been principally international locations with ports and distribution and transhipment centres equivalent to Belgium, Germany, Netherlands, and France.
The EVFTA, which took impact in August final yr, has opened up nice export alternatives to a market with a GDP of US$15 trillion for Vietnamese firms.
The EU was Vietnam’s fourth largest market with purchases of US$43.7 billion final yr.
To benefit from the tariff preferences, leather-based items and footwear must adjust to the principles of origin and get a EUR.1 Certificates of Origin.
Some 32 – 34% of exports benefited by getting the certificates, indicating that Vietnamese companies and items are more and more capitalising on concessionary tariffs in FTA associate markets, the Ministry of Business and Commerce mentioned.
It mentioned that between August 1 final yr, when the EVFTA took impact, and April 4, authorised companies in Vietnam issued 127,300 certificates of origin to allow exports price practically US$4.8 billion.
The nation has change into the “footwear manufacturing facility” of the world, whereas its personal market has a inhabitants of greater than 96 million.
However the interruption of the worldwide provide chain by the Covid-19 pandemic has triggered alarm within the Vietnamese leather-based and footwear business since it’s closely depending on uncooked materials imports.
To develop sustainably and take advantage of tariff incentives and alternatives introduced by the EVFTA and Complete and Progressive Settlement for Trans-Pacific Partnership, leather-based and footwear companies must develop home sources or diversify international sources.
Sixty % is imported from China, in response to Phan Thi Thanh Xuan, common secretary of the Vietnam Leather-based, Footwear and Purse Affiliation (Lefaso).
Many companies have began to search for uncooked supplies in different markets equivalent to India, Europe, Singapore, and Japan.
The pandemic stays a significant hurdle, specialists mentioned, but when enterprises work arduous to seek out companions and enhance their competitiveness, the alternatives stay enormous.