According to Diep Thanh Kiet, a member of WEC Saigon’s board of directors, Vietnam is second only to China in terms of footwear export volume, with roughly 1 billion pairs each year.
However, in the long term, Vietnam’s footwear industry can still compete with China in terms of labour costs, income per capita, economic policies and export market. Furthermore, the CPTPP trade agreement is expected to help Vietnamese footwear makers to enhance their competitiveness thanks to tariff preferences in the final months of 2019.
Vietnamese shoemakers have high expectations for the CPTPP. (Source: VOV)
Kiet’s expectations are also echoed by many other footwear producers as the ministries concerned are working hard to formulate directives and circulars guiding the implementation of the trade pact, fully known as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Phan Thi Thanh Xuan, General Secretary of Lefaso, an association of leather and footwear companies, stated that, among the CPTPP members, Vietnam has yet to sign a bilateral agreement with Canada and Mexico, while trade pacts have been inked with Japan and Chile.
Therefore, the CPTPP is a great opportunity for Vietnamese producers to boost their exports to these markets. In addition, the interest of a number of Canadian and Mexican importers in Vietnamese footwear and handbag products is a favourable factor for Vietnamese producers to explore the new markets.
In fact, Vietnamese footwear and leather products are already exported to these markets but the revenues are relatively low, earning approximately US$100 million in the Canadian market, for instance. Revenues from footwear exports to Mexico are even much lower.
More importantly, most of the products were imported to the United States and then distributed to Canada and Mexico. However, due to obstacles in re-negotiating the NAFTA, Canadian and Mexican importers have become more active in approaching other markets without relying too much on the US market.
According to Ngo Chung Khanh at the Ministry of Industry and Trade, the CPTPP will bring significant value to Vietnamese producers when opening the three new markets of Canada, Mexico and Peru at the same time./.