Deputy Minister of Industry and Trade Ho Thi Kim Thoa has called for local leather and footwear enterprises to beef up investments in production of materials to benefit from the free trade agreements (FTAs) Vietnam has signed and will sign.
Enterprises in the sectors will enjoy full preferential tariffs if they use domestically-made materials to turn out products for export to member states of the FTAs, Thoa said at a meeting of the Vietnam Leather, Footwear and Handbag Association (Lefaso) in Hanoi on Tuesday.
Thoa was quoted by the Vietnam News Agency as saying that FTAs including the Trans-Pacific Partnership (TPP) trade pact will open up opportunities for Vietnamese enterprises.
Vietnam and 11 other Pacific Rim countries conclude negotiations over the TPP in Atlanta City of the United States in October last year and are expected to sign the trade deal next month.
Lefaso chairman Nguyen Duc Thuan told the meeting that FTAs would bring many new opportunities to leather and footwear enterprises, but also pile pressure on export firms. Therefore, enterprises should make thorough preparations and invest in new technologies to increase their productivity.
Last year saw leather and footwear exports jumping 16% year-on-year to nearly US$15 billion. Of which, outbound sales of footwear accounted for US$12 billion, up 16%, and handbags made up US$2.88 billion, up 14%.
Thuan said that Vietnamese leather and footwear shipments to traditional markets grew well last year, with a 20% increase from the U.S., 10% from the European Union (EU) and 50% from China.
Last year, many local enterprises improved product quality and productivity as well as expanded markets, especially those in ASEAN and Africa.
Many more investors from China, Japan and other countries have come to Vietnam to build leather and footwear factories to take advantage of low-cost labor and tax incentives from the FTAs.
Leather and footwear export revenues are forecast to pick up 15-20% this year, mainly helped by the FTAs and the recent establishment of the ASEAN Economic Community (AEC).
Source: The Saigon Times Daily
Keywords: Leather, footwear, firms, urged, invest, material production
