EVFTA opportunities for Vietnamese footwear products

Vietnam is the third largest footwear exporter in Asia and the fourth largest in the world. Notably, the number of footwear exported from Vietnam is only behind China. Every year, Vietnam exports more than 1 billion pairs of shoes of all kinds to hundreds of countries around the world.

The EU market accounted for the largest proportion of Vietnam's total footwear exports -  22% of Vietnam footwear export turnover in 2020. Of which, exports to Germany accounted for 23.5% of Vietnam's total footwear export turnover to the EU (The General Department of Vietnam Customs, 2020).

Germany is currently one of the largest footwear consumption markets in the world. In 2018, Germany ranked 7th among the countries with the highest consumption of this product with a total of 451 million pairs, equivalent to 2% of global footwear consumption (worldfootwear.com, 2019). The demand for footwear imports of Germany has also increased in recent years, from USD 8 billion in 2010 to USD 12.44 billion in 2020 (ITC Trademap, 2021).

According to ITC Trademap, before 2013, Vietnam's footwear exports to Germany only grew slightly, because Vietnam was not eligible for GSP preferential tariffs and also subject to anti-dumping duties up to 10% in the period of 2006-2009. From 2014 onwards, Vietnam's footwear export turnover to Germany increased continuously, reaching USD 2.12 billion in 2020. This impressive export figure helped footwear become one of major export products of Vietnam to Germany, and helped Vietnam occupy the second position behind China among Germany's largest footwear importers in 2020.

With the EVFTA, Vietnamese footwears exported to Germany were eliminated 37% of tariff lines at entry into force of the Agreement (August 1, 2020). Of which, there are many key footwear products exported from Vietnam to Germany such as sports footwear (tennis shoes, basketball shoes, gym shoes, etc.).  The remaining 63% of the footwear tariff lines will be eliminated after 3, 5 or 7 years. This will be a huge advantage for Vietnam's footwear compared to other major competitors such as China (subject to an average MFN tariff rate of 9.95% in 2021), or Germany's GSP beneficiary countries such as Indonesia (subject to an average GSP tariff rate of 5.99%).

EVFTA full text for more information: https://wtocenter.vn/chuyen-de/12778-eu-vietnam-trade-and-investment-agreements 

Source: "Business Handbook: Exploiting the EVFTA  to import and export goods between Vietnam and Germany" - Center for WTO and International Trade