Workers produce shoes for export at My Phong Shoe Company Limited in the southern province of Tra Vinh. Viet Nam is currently the third largest exporter of footwear in the world. — VNA/VNS Photo An Hieu

HA NOI (Biz Hub) — Viet Nam is now the third largest exporter of footwear in the world, and it can increase its exports further by using opportunities provided by free trade agreements.

Phan Thi Thanh Xuan, general secretary of the Viet Nam Leather, Footwear and Handbag Association (Lefaso), said Viet Nam was the world's fourth largest footwear producer, after China, India and Brazil, but it had the third largest value of exports, after China and Italy.

Vietnamese footwear has been shipped to 50 overseas markets, and the country is the second largest footwear exporter to the United States, the European Union and Japan, Xuan said. Also, Vietnamese handbags have been exported to 40 countries and territories.

According to the General Department of Customs, the value of the leather, footwear and handbag industry's exports reached $5.84 billion in the first five months this year, up 16.8 per cent from the same period last year.

The association expected the industry to achieve year-on-year growth of 18 per cent in the first half of this year, with total export value reaching $7.15 billion — $5.7 billion from footwear and $1.45 billion from handbags.

Xuan said existing and future free trade agreements (FTAs) were expected to have a positive impact on the development of the industry. These agreements include the Trans-Pacific Partnership (TPP) agreement, the Viet Nam-European Union FTA, the agreement with the Eurasian Economic Union, and the Association of Southeast Asian Nations Economic Community agreement.

When the TPP deal is signed, Viet Nam expects import tax rates to drop from between 3.5 per cent and 57.4 per cent to zero. Xuan said that would be a breakthrough for the industry, enabling it to increase its exports in both volume and value.

This year, the FTAs had had no direct impact on the industry's exports, but they had created favourable conditions for the industry to attract investments in production of material and finished products for export, she said.

Viet Nam needs to develop its production of raw material for the footwear and handbag industry to reduce its dependence on China in this regard, according to the Xuan. The industry expects foreign investors to bring production technology to improve the quality of products and upgrade the technology here.

The industry and Lefaso would work with the Viet Nam Trade Promotion Agency to hold a conference on trade promotion for the leather, footwear and handbag industry on July 15 with the aim of attracting more foreign investors, Xuan said.

She noted that some 200 local and foreign companies would take part in the conference to promote cooperation in investment, production and trade.

The participants would discuss opportunities and challenges faced by the local footwear and handbag industry in production and export, as well as ways to improve the competitiveness of the industry by 2020, the Thoi bao Tai chinh online reported. — VNS