EVFTA: Bottleneck For Vietnamese Textile And Leather Shoes Export

In the short term, Vietnam and the European Union free trade agreement (EVFTA) will not be able to inject strong momentum into Vietnam's textile and leather industry. However, EVFTA is expected to help increase the export market share of the two industries and bring long-term benefits.

EVFTA has opened up export markets for export enterprises engaged in textile, leather shoes and other fields, bringing opportunities for export promotion, especially in the domestic and world economies, which have suffered from COVID-19. However, experts believe that after the entry into force of the agreement, enterprises will have to meet many conditions and further improve the quality of production and operation to take advantage of the opportunities brought about by the agreement.

The chairman of the Vietnam Textile Association, Wu De Jiang, said that the approval of the agreement by the Congress would be good news for the textile industry that caused losses due to COVID-19. After the EVFTA comes into force, it will provide enterprises with many opportunities and make positive contributions to the Vietnamese economy in the future.

The EU's textile imports amount to an annual average of US $250 billion. At present, the EU is the world's largest textile import market, accounting for 34% of global textile imports. At the same time, Vietnam's textile exports to the market accounted for only 2.7% of the total. The business community commended that after the entry into force of EVFTA, the textile industry is expected to increase its export space to the EU market. Textile exports to the EU are expected to grow rapidly, reaching 67% in 2025.

Wu De Jiang, chairman of the Vietnam Textile Association, believes that expanding exports to Europe is of great significance and helps Vietnam to rely on one market. Enjoying zero tax rate will bring many opportunities for textile enterprises to expand export market. However, to take advantage of this opportunity, enterprises in the field need to prepare ahead of time, make detailed plans and understand the requirements and requirements of EVFTA, such as the standards of products and the needs of consumers in every market. The European Union is a very picky market, with strict commercial conditions, high quality standards and product design requirements. Once a mistake is made, it will affect the entire export activity of the market.

Fei Yuezheng, general manager of Hoan Kiem Lake textile company, said that according to EVFTA's commitment, the rules of origin are very strict. For enterprises, this is a huge challenge, because the raw materials currently used to produce export products are mainly imported from China or ASEAN countries. In order to maximize the benefits of EVFTA, both the management and the business community must take part in it.

Textile enterprises believe that there should be an incentive policy to facilitate domestic and foreign enterprises to invest in raw material production. In particular, a mechanism should be established to promote the docking between raw material production enterprises and production enterprises, so as to form a closed chain to meet the requirements of the rules of origin.

Wu De Jiang, chairman of the Vietnam Textile Association, also stressed the need to promote the construction mechanism of modern waste water treatment industrial zones to improve the manufacturing - dye sewing schedule, contribute to the global supply chain and reduce dependence on imports to maximize the benefits from EVFTA and other trade agreements.

Shen Deyue, general manager of No. ten clothing company, said that Vietnamese textiles enjoy the principle of EVFTA import tariff and preferential treatment. However, the current production enterprises are not yet transparent about the origin of raw materials.

General manager Shen Deyue said, "EVFTA has many bottlenecks for Vietnam to dredge up, and the remaining problems are decided by us. The EU is willing to import Vietnamese goods, but the core issue is the need to ensure its origin. It is hoped that under the influence of EVFTA, the textile industry will seize the opportunity and increase its value at every stage.

As far as leather shoes are concerned, Ruan Guojun, the representative of Rong Tong Limited Liability Company, which specializes in exporting footwear to the European market, said that since 2020, due to COVID-19, the company's production and export activities are facing various difficulties. Therefore, enterprises expect that EVFTA will help increase the export of footwear in the last few months of this year. However, the company will face certain difficulties in meeting the rules of origin. At present, only 60% of the raw materials come from China, and the remaining 40% are imported from abroad and mainly from China. At the same time, due to the lack of internal force, technology investment and expansion of production are limited.

Under the background that many production technologies of leather shoes enterprises are still limited and are being gradually improved to meet the requirements of EVFTA, Ruan Wenqing, secretary general and vice chairman of Hu Zhiming leather shoes Association, said that at present, Vietnamese leather shoes enterprises can not take advantage of many opportunities of EVFTA.

Experts believe that in the short term, EVFTA will not be able to inject strong momentum into Vietnam's textile and leather shoes industry, but it is expected to help increase the export market share of the two industries and bring long-term benefits.

Many enterprises expect foreign enterprises to realize that Vietnam is a potential market, thereby enhancing technology transfer and investment in raw material chain.