EVFTA EXPECTED TO BOOST VIETNAM FOOTWEAR EXPORTS TO EU

The EU-Vietnam Free Trade Agreement (EVFTA) is expected to boost Vietnamese leather and footwear exports to the European Union market, heard a conference organized by the European Trade Policy and Investment Support Project (EU-Mutrap) in Hanoi on November 15.

Vietnam fetched US$16 billion from leather and footwear exports in 2016, the fourth biggest export earner after phones and phone parts, textiles and garments, and computers, and electronics, Vietnamplus news website reports.

Data of the Vietnam Leather and Footwear Association (Lefaso) shows that in 2016, Vietnam was the third largest footwear manufacturer in the world after China and India.

As of late 2016, two years since Vietnam enjoyed the EU’s generalized system of preferences (GSP) with tariffs slashed from 13-14% to 3-4%, the country’s leather and footwear exports to the EU hit nearly US$5 billion, making the EU the second largest leather and footwear importer of Vietnam after the U.S.

Phan Thi Thanh Xuan, vice chairwoman and general secretary of Lefaso, said when EVFTA goes into force, it would boost Vietnamese leather and footwear exports to the EU.

However, domestic leather and footwear manufacturers and exporters will also face several challenges. To meet the EU’s requirements, Vietnamese businesses will have to improve technologies and manufacturing processes to ensure high quality.

Besides, most leather and footwear manufacturers in Vietnam are foreign-invested. Therefore, domestically owned firms will have to improve competitiveness and increase market share.

According to Trinh Thu Hien, director of the origin of goods division under the Ministry of Industry and Trade’s Export-Import Department, to make the most of EVFTA, businesses would have to comply with EVFTA’s rules of origin.

“Businesses will not be able to enjoy tariff cuts to 0% if they fail to meet EVFTA’s rules of origin,” Hien said.

Professor Sanggeeta Khorana, an expert from EU-Mutrap, said when Vietnamese businesses are subject to the EU’s barriers and anti-dumping measures, they should provide sufficient evidence of the absence of subsidy.

According to Sanggeeta Khorana, an anti-dumping investigation can be initiated whenever the Directorate General for Trade of the European Commission decides that data are sufficient to launch an official investigation.

Source: The Saigon Times