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    Shoe Factory Cancels Tariff 71%, Vietnam Wants To Restructure Industry Chain

    2020/6/16 18:30:00 26

    Shoe FactoryTariffIndustry Chain

    Recently, Vietnam and the European Union completed the trade agreement. The core point is to break the tariff barrier. According to the The Associated Press, the EU will cancel its 85% tariff on Vietnamese goods and will gradually reduce the remaining tariffs in the next 7 years when the month comes into force.

    Similarly, Vietnam also abolished the 49% import tariff on exports to the EU and reached 0 tariffs in 10 years. This will substantially boost Vietnam's economic growth. The Associated Press reported in the report that Vietnam has been recognized by many countries in the control of the new crown virus epidemic, and the tariff agreement with the EU will be an important driving force to get out of the economic downturn.

    According to DPA, Vietnam and the European Union free trade agreement will take effect in August this year, when Asian emerging countries Vietnam can export most commodities to the European Union (EU) with zero tariff.

    Specifically, after the entry into force of the agreement, 71% of Vietnam's tariffs on EU exports and 65% of EU tariffs on Vietnamese exports will be lifted immediately. In the next ten years, 99% of the commodity tariffs will be abolished. It is expected that the agreement will help Vietnam increase exports to the EU by 44% by 2030.

    Manfred Junkert, President of the German leather and Footwear Association, said that EVFTA is of great significance to free trade and to crack down on protectionism. (Junkert) Germany is expected to become an important partner in Vietnam's leather and footwear industry, and Vietnam is the potential market for German footwear products.

    In 2019, Vietnam exported 112 million pairs of shoes to Germany, an increase of 6.9% over the same period last year. It is the second largest supplier of footwear products in Germany, accounting for 15.3% of the total number of imported footwear products in the country.

    For leather products, Germany imported $314 million from Vietnam in 2019, an increase of 5.7% over the same period last year. It is the third largest supplier of leather products in Germany, accounting for 7.4% of the total imports of leather goods.

    Manfred Junckert believes that the investment opportunities of German enterprises in Vietnam depend on the situation of Vietnam's new crown pneumonia epidemic prevention and control and the strength of Vietnamese enterprises.

    Vietnam wants to rebuild shoes and apparel industry chain

    The epidemic reveals the defect of Vietnam's manufacturing industry, that is, raw materials are quite dependent on the mainland of China.

    When Vietnam's factories resumed, production was still limited due to the lack of material supply from mainland China. This is quite obvious for Vietnam's main export products: textiles, footwear and electronic products.

    Analysts said that although the new crown virus did not cause Vietnam's health crisis, it showed that the trade chain was rather dependent on the mainland's shortcomings. So it is the right time for the free trade agreement (EVFTA) with the European Union, because all parties are aware that they need to modify the supply chain diversification.

    According to EU data, Vietnam is the second largest trading partner of the European Union in Southeast Asian countries, and bilateral trade reached 56 billion US dollars last year.

    At the same time, Vietnam also actively joined the TPP, and agreed with similar commitments.

    Vietnam has made economic reforms to integrate into the global economy for more than 30 years. The country with 95 million population is emerging as a manufacturing power. But it has a long way to go. Its per capita income is far behind that of Singapore, Hongkong and Malaysia, and less than half of Thailand's.

    Lan said its aim is to establish links with countries with advanced technology and good corporate governance.

    The free trade agreement with the EU will help Vietnam improve its skills and standards. This is a great opportunity for Vietnam, "Lan said.

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