Even when the EU – Vietnam Free Trade Agreement comes into effect, Vietnam’s handicraft products cannot enter the EU market if they do not meet requirements of traceability. Therefore, traceability is a challenge for Vietnam handicraft exports to expand to the European countries in the future.
“We have a lot of difficulties in completing procedures to get certificates of origin (C/O) because we do not have enough invoices and documents,” a director of a Vietnam handicraft company said to the Nhip cau dau tu magazine (Business Review).
He said material supply chain has too many small suppliers and households who have no valid input invoices. Therefore, local businesses of Vietnam handicraft exports should face difficulties in implementing traceability for their products.
Namely, Vietnam has very few suppliers of chemicals and materials with certificates in the supply chain of the handicraft industry. Also, they have too many commodities and diversified manufacturing processes so they also face difficulties in the following traceability.
Handicraft products are not essential goods, but demand for these decorative products is increasing in developed countries, according to the Vietnam Handicraft Export Association (Vietcraft). “The global market has a huge demand for handicrafts, worth a total of $100 billion, but Vietnam handicraft exports just account for 2%,” said Le Ba Ngoc, Vietcraft vice-chairman.
The traceability issue is challenging the growth of the domestic handicraft industry with more than one million workers and a total export value of about $1.7 billion per year, Ngoc said.
At present, the Government aims to develop the national traceability system. This is a great policy but the system may take more than five years to develop. Therefore, handicraft export enterprises of Vietnam could not take advantages of the EVFTA.
Meanwhile, Vietcraft has encouraged local enterprises to systematze the supply chain from communes. By this way, it will force enterprises of Vietnam handicraft exports to reorganize the material supply system, he said.
Local enterprises need to have enough knowledge about this issue according to the market demand. That would help them boost Vietnam handicraft exports to other countries, especially to the EU that has strict requirements.
Vietnam has exported its handicraft products to 163 countries and territories worldwide, including rattan and sedge products. However, the handicraft export value to the EU market has been low, of which the export value to Germany accounts for 8% of the total and 7% to France. Therefore, Vietnam has great potential in exporting handicrafts to the European market.