The Supporting Industry Forum 2019 takes place in HCM City on December 13 (Photo: VNA) HCM City (VNA) – Theleather-footwear industry of Vietnam has established its foothold in the globalmarket, but challenges are still lying ahead, requiring it to work harder tograsp big chances created by new-generation free trade agreements (FTAs).
This was the focus of the Supporting IndustryForum 2019, held in Ho Chi Minh City on December 13.
Deputy Minister of Industry and Trade Do ThangHai said leather-footwear is one of the key exporting industries of Vietnam.With an annual export growth rate of over 10 percent, the industry earned thecountry approximated 20 billion USD in 2018 and over 10 billion USD in thefirst half of 2019.
The Vietnam Leather, Footwear and HandbagAssociation (Lefaso) forecast this year’s leather-footwear exports at some 21.5billion USD, up 10 percent from 2018.
Vietnamese footwear has been shipped to morethan 100 countries, including 50 with imports worth over 1 million USD fromVietnam. The largest markets are the US, the EU, China, Japan and the Republicof Korea.
Vietnam is the world’s second biggest footwearexporter, and this industry is now a great contributor to the national economy,Lefaso said, noting that many companies have expanded production, renovatedtechnology and diversified design to meet consumers’ demand.
However, Lefaso admitted that those achievementsare mainly contributed by FDI firms which account for just over 10 percent ofall businesses but make up 70 – 80 percent of total export revenue of thisindustry.
Additionally, the sector is facing numerouschallenges such as rising workers’ wage, the Fourth Industrial Revolution, andglobal economic uncertainties amidst growing protectionism and trade war betweenthe world’s two biggest economies.
According to the association, FTAs like theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)and the EU-Vietnam FTA are generating considerable opportunities for theleather-footwear sector. Once these deals become fully effective, tariffbarriers in EU and CPTPP members will be removed, promising stronger exportgrowth for the industry.
However, to capitalise on these chances, Lefasoand its member businesses have to deal with existing bottlenecks, includingunderdeveloped supporting industry and a lack of support policies, plans onvalue chain development, strong brands, design personnel, as well as researchand development centres.
Deputy Minister Hai said these challengesrequire the industry to pay more attention to promoting productivity and humanresources quality, forming value chains, and applying science-technology toimprove products’ value and keep foreign investors in the country./.
VNA
