IẠP CHÍ CÚNG TltfdHG• NGUYEN auoc THAI - PHAM THI THUY TRANG ABSTRACT: Despitethe on-goingCOVID-19 pandemic, Vietnam's footwear exports to the EU marketin the first months of 2021 still
Trang 1IẠP CHÍ CÚNG TltfdHG
• NGUYEN auoc THAI - PHAM THI THUY TRANG
ABSTRACT:
Despitethe on-goingCOVID-19 pandemic, Vietnam's footwear exports to the EU marketin the first months of 2021 still grew partly thanks to the EU-Vietnam Free Trade Agreement However, theEU is a difficult market with complextechnicalbarriers to trade(TBT) and many Vietnamese businesses have not fullyunderstood these technical barriers This paper analyzes some impacts of the EU’s technical barriers to trade on Vietnamese footwear exporting enterprises
Keywords: barrier,the EU, technical barriers to trade (TBT),footwear,impacts
1 Introduction
According to the World Trade Organization
(WTO), technical barriers to trade are technical
regulations and standards that a country appliesto
imported goods and/or the procedures for
assessing whether an imported product conforms
with the conformity of those standards and
regulations Theoretically, technical barriers to
trade are usedto protect human health and safety,
animals and plants, and ecological environment
Due to the process of trade liberalization, tariff
barriers are gradually removed, socountries seek
to strengthen their barriers to create difficulties for
imports, especially in developed countries
including theEUmarket
The EUand Vietnam officially signed the EU
-Vietnam Free Trade Agreement (EVFTA) on 30
June 2019 andit officially took effect from August
1, 2020 This is a comprehensive and
new-generation free trade agreement with high
quality commitments covering wide scopes in
action The EVFTA’s commitments mainly cover trade in goods and services, investment, rules of origin, customs, trade facilitation, trade defense, state-owned enterprises,governmentprocurement, intellectual property, sustainable development, sanitary and phytosanitary measures (SPS), and technical barriers to trade(TBT)
The EU is a single market which has a huge demand for footwearand it is alsoone ofVietnam's largest ttading partners According to the International Trade Center (ITC), the import turnoverof footwear(HS Code64)inthe year 2019
of 27 EU countries was US $58.53 billion.Inwhich, Vietnam was the second biggestfootwear exporter
to the EU, after China This article aims to summarize the exports of footwear to the EU, analyze the actual situation of the EUmarket's TBT for footwear, studysomeimpactsof thesebarrierson Vietnam’s footwear exports,and thereby proposing some solutions to help Vietnamese businesses overcome these barriers and promote Vietnam’s
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footwear exports to the EU after the COVID-19
pandemic
2 Vietnam's footwear exports to the EU
market
Currently, Vietnam is world’s second largest
exporter of footwear According to the General
Statistics Office’s data, the export turnover of
footwearhad grown continuously over the period
from2010 to 2019,from US $5.1 billion in 2010to
US $18.3 billion in 2019, representing an increase
ofmorethan 3.5 times However, in 2020due to the
COVID-19 pandemic, Vietnam's footwearexports
only reachedUS $16.8billion, decreased by 8.3%
comparing to one yearago Inthe first five months
of 2021,Vietnamsfootwearindustryexperienced a
prosperous export growth with an increase of
25.5% over the same period of last year and
reached a totalvalue of US $8.4billion This shows
that Vietnam has effectively prevented and
controlled the COVID-19 pandemic, many
countries have increased their footwear imports
after the COVID-19 pandemics blockades
The majorfootwearexportmarketsof Vietnam
in 2020 was the USA with an export turnover of
US$6.3 billion(accountingfor37.5%); the EU was
thesecondlargest footwear market of Vietnam with
an exportturnoverofUS$3.8 billion(accounting for
22.6%); the third biggest market was China
(US $2.07 billion, 12.3%);the fourth biggest market
was Japan (US $848 million, 5%); and the fifth
biggest marketwas Korea (US $549 million, 3.3%)
7 000
6 299
Chart 1 Vietnam's footwear export market in
2020 (US $ million)
USA EU China Japan South
Korea
Source: Compiled from the General
Statistics Offices data
Footwear exports to the key markets in the EU (27 countries): Due to the impact of COVID-19 pandemic, footwear exports to the EU countries in
2020 decreased by 24.5% compared to 2019
However, the exports of footwear to this market increased again in the first five months of2021 with
a rise of 16.6%overthe sameperiod and reachedUS
$1.96 billion
According to the footwear exportdatain 2020 of the General Department of Customs, Belgium was thelargest footwear export marketof Vietnamand reached US $987 million,accounting for 26% of the total export turnover of Vietnamese footwear to the
EU It was followed by theGermanywiththe export turnover of US $894 (accounting for 23.5%), the Netherlands ranked thfrd with a export turnover of
US $683 million (accounting for 18%) Other markets suchas France,Italy,and Spainrespectively reached US $423 million (11.1%), $245 million (6.5%),and $176million (4.6%) in2020
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Chart 2: Key footwear export markets of
According to data from the General Department
of Customs, Vietnam's key footwear products exported to the EU include HS Code 640411 (Sports footwear; tennis shoes, basketball shoes, gym shoes, framing shoes, and the like withouter soles of rubber or plastics), HS Code 640399 (Shoes with outer soles of rubber, plastics or composition leather andwithuppers of leather(not including ankle, incorporating a protective metal toe-cap,sportsfootwear,orthopedic shoes, and toy shoes)) and other HS Code 640419, 640299, 640291,640319, etc
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3 Some of the EU ’ s TBT of footwear
TheEUcurrentlyhas27member states (after the
withdrawal ofthe UK on January 31, 2020) with a
population of around 450 million people, 50% ofthe
footwear here being importedmainly by orders This
is a stringent import marketwith non-tariff barriers,
including technical barriers to trade, which are
considered the most complicated barriers, causing
difficulties for footwear exporters
• Product safety: All products, includingleather
shoes, to be consumedin Europe are required to
comply with the regulations of the Directive No
2001/95/EC(The European Union General Product
Safety Dừective)
• Labeling Regulations: Footwear exported to
theEU market mustcomply with the regulations on
labeling thematerialsused in themain components
(uppers,in-soles, outer soles) According to theEU
Dừective No 94/11/EC on labeling footwear, the
label must be legible, printed, stuck,embossed, or
affixed to at least one of each pair of shoes
• CITES (Convention onInternational Trade in
Endangered Species of Wild Fauna and Flora):
According to the Council Regulation No.338/97 on
the protection of wildlife, businesses wishing to
export footwear to the EU need to checkthelistof
plants and animals restricted from use on the
website of theEUTrade Helpdesk
• REACH: This is a regulation related to the
four processes of REACH, namely registration,
evaluation, authorization, and restriction of
chemicalsforimported products into theEUmarket
with methods of assessing the hazards of
substances used in the product According to this
regulation, the use of chemicals is restricted by
quantity limits (mg or kg) or banned altogether
REACH is considered the most stringent and
complex chemical regulation in the world
(details are available on:
regulations/ reach/understanding-reach)
https://echa.europa.eu/
• POPs (Persistentorganic pollutants): The use
of POPsis prohibited under theEU Regulation No
2019/1021 However, POPs are also sometimes
used to produce fireproof, water-resistant fabrics,
or atthe end of the shoe making process
• RSLs (Restricted Substances List): This is a requừement of many retailers and fashion brands, more stringentthanthe REACH regulation RSL is forleather footwear and textilebuyers in the EU
• Restriction on the use of certain chemical substances: The EU has Regulation No 1907/2006
onthe list ofsome chemicals that arerestricted or prohibited from being used in the production process In Regulation No 528/2012, the EU also providesa list of biocides thatare allowed to use in production
Recently,theEU has Regulation No.2019/1021 banning the use of serious envừonmental contaminants in products
• Intellectual Property Rights: Leather shoe exporters wishing to sell their designs in the EU market need to ensure that they do not infringe intellectual property rights If the EU importers provide designs, they will be responsible for products foundby the EU to infringe intellectual property rights
Businesses can access the website of EUIPO (European Union Intellectual Property Office) if the data on designs are protected by the EU intellectual property rights If the designs are protected outside the EU, they can check the website of WIPO (World Intellectual Property Organization)
• CSR(Corporate Social Responsibility): Many importers in Europe require exporters to have a commitment to respect labor law, be responsible for employees, responsible for the living environment or how totreat waste, responsible for each product to the customer, provide the certificate of origin of theproduct, etc
4 Some impacts of technical barriers to trade
on footwear exports from Vietnam to the EU
When implementing the commitments in the EVFTA, Vietnamese enterprises have the opportunities to exploit the sources ofimported materials, machinery, and technology from the
EU, especially from the countries with modern footwearproduction such as Germany and Italy
so that the export products meet the technical
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regulations and standards of this market Besides,
Vietnamese businesses have to improve
production activities, innovate technology,
enhance product quality and labor skills, etc In
particular, domestic small and medium-sized
enterprises will also strive to overcome barriers,
improve competitiveness, and become more
mature
In addition, Vietnam is forced to change,
improvethebusiness and institutional environment
towards more transparency in line with
international practices This enhances the
reputation andthe competitivenessof Vietnamese
footwear products in the world market.Vietnamese
enterprises notonly promote exportto the EU but
also tootherhigh-quality markets
I The EU countries are abusing technical barriers
to trade atamore sophisticatedlevel for imports in
the name of protecting public health, protectingthe
environment, etc when tariff tends to gradually
decrease to 0% under theintegration process
The domestic leather and footwear industry is
facing major problems as 90% of Vietnam's leather
and footwear products are processed for export
Currently, thepercentage of domestic raw material
supply is low,only reaching 40-45% of the demand
and the quality has not met most of the customers
needs.Compulsoryrequirements on products to be
safe, labeled,socially responsible, environmentally
friendly, met the rules of origin and intellectual
property rights, etc will be big challenges for
footwearexporters, increasing costs and reducing
the competitiveness of enterprises
Many domestic footwearenterprises have weak
capital, production management, labor skills,
technology In addition, they still have many
limitations in terms of their ability to grasp TBT
measures, update market information as well as
diverse needs of theEUcustomers This also leads
to manyrisks forVietnam's footwear exports to this
difficult market
5 Some solutions and recommendations
• Vietnamese footwear exporters need to
carefully studythecommitments in the EVFTA and
the technical barriers of the EƯ to exploit the opportunities brought by the EVFTA
• Enterprises should invest more in technological innovation; improve productquality; focus on product design, professionaltraining, and market research; enhance internal capacity in management, finance, human resources, etc to meet the standards of theEU market and increase theircompetitiveness
• It is necessary to promote the formation of linkage networks toprovide products and services between enterprises Thereby, businesses willbe more proactivein the source of raw materials for the productionof footwear
• Small businesses need to step up further in cooperation and information sharing to easily grasp the EU customers strict regulations
• The government should promote a synchronous plan for the leather and footwear industry, especially developing high-quality supporting industries In addition, it is necessary to create amore favorable business environment and improve institutional capacity towards more transparency
Currently, FDI enterprises are very strong in capital, production, technology, raw material supply and account for a very high proportion of footwear exports Accordingly, the state should strengthen support in line with WTO to help domestic, small businesses improve theữ production capacityand grasp non-tariff barriers of the market
6 Conclusion
As the COVID-19 pandemic is gradually being controlled with a growing supply of vaccines, the EU market is forecasted to fully reopen and recover quickly Thereby it is an opportunity for Vietnam's goods exports to the
EU to develop strongly However,the EU’s TBT are considered the biggest obstacle for Vietnamese footwear exporters Businesses needto make great efforts toovercome barriers,
to promote footwear exports to this difficult market■
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Received date: July 20,2021
Reviewed date: August 5,2021
Accepted date: August 19, 2021
Author information:
1 NGUYEN QUOC THAI 1
2 PHAM THI THUY TRANG1
1 Faculty of Business Administration, Nguyen Tat Thanh University
MỘT SỐ TÁC ĐỘNG CỦA RÀO CẢN KỸ THUẬT TRONG THƯƠNG MẠI (TBT) Đối VỚI MẶT HÀNG GIÀY DÉP
CỦA VỆT NAM XUẤT KHAU sang EU
• ThS NGUYỀN QUỐC THÁI’
• ThS PHẠM THỊ THÙY TRANG'
'Khoa Quàn trị Kinh doanh, Đại học Nguyên Tất Thành
TÓM TẮT:
Trong bốicảnhđại dịch COVID-19 đang diễn raphức tạp, hoạt động xuất khẩu mặt hàng giày Ịdépcủa Việt Namsang thị trường EU trong cáctháng đầu năm2021 vẫntăng trưởng Điều này cho thấy đã cónhững tínhiệutíchcực do Hiệp định EVFTA mang lại Tuy nhiên, EU là thịtrường khó línhvới cácràocản kỹ thuật tíong thương mại (TBT) phức tạp mànhiềudoanh nghiệp Việt Nam chưa nắmrõ Bài viếtphântíchmộtsốtácđộng củarào cản TBT khi cácdoanhnghiệp Việt Nam xuất khẩu giày dép sang thị trường này
Từ khóa: Rào cản, EU, rào cảnkỹ thuật trong thương mại (TBT),giày dép,tácđộng
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