Using swot model to analyze the potential impact of the eu vietnam freetrade agreement (evfta) on vietnam’s leather and footwear exports

NATIONAL ECONOMICS UNIVERSITY Việ n Đào tạ o Tiên têến, Chấết lượng cao POHE -*** - GROUP ASSIGNMENT CASE: Using SWOT model to analyze the potential impact of the EU-Vietnam Free Trade Agreement (EVFTA) on Vietnam’s leather and footwear exports Students: Group Advanced Accounting K63 Hoàng Việt Anh Trần Đức Anh Đặng Minh Quý Hoàng Gia Vinh Võ Long Huy Trương Khánh Linh Ha Noi, 2023 TABLE OF CONTENT INTRODUCTION ABOUT EVFTA AND ITS MEANING TO VIETNAM CURRENT SITUATION OF THE LEATHER AND FOOTWEAR EXPORTS IN MEMBERS COUNTRIES OF EVFTA .4 2.1 CIRCUMSTANCES OF THE FOOTWEAR INDUSTRY IN THE WORLD .4 2.1.1 Market Overview .4 2.1.2 Market Leaders 2.1.3 Leading Footwear Market .6 2.2 BACKGROUND OF THE FOOTWEAR INDUSTRY IN THE EU 2.2.1 Contribution to the Economy of the EU 2.2.2 Exports 10 2.3 SITUATION OF FOOTWEAR IN VIETNAM 11 2.3.1 Market Overview 11 2.3.2 Competitive 12 2.3.3 Supply and Demand .13 2.3.4 Economical Factors .15 SWOT MODEL ANALYSIS .16 3.1 Strengths: 16 3.2 Weaknesses: 18 3.3 Opportunities: .19 3.4 Threats 21 RECOMMENDATION AND SOLUTIONS 22 REFERENCE .24 INTRODUCTION ABOUT EVFTA AND ITS MEANING TO VIETNAM On June 30, 2019, the European Union (EU) and Vietnam signed the comprehensive and ambitious European Union-Vietnam Free Trade Agreement (EVFTA) The agreement aims to promote long-term development, strengthen economic cooperation, and increase trade and investment between the two regions Among the legal documents that comprise the EVFTA are the main agreement, annexes, and protocols The principal agreement concerns investment, intellectual property, government contracting, and sustainable development, in addition to trade in goods and services The EVFTA evolved throughout the course of discussions that began in 2012 and ended in December 2015 In June 2018, the agreement's language was authorized, after which it was reviewed and finalised Following several rounds of legal review and translation, the EVFTA was signed on June 30, 2019 The agreement became effective on August 1, 2020, following ratification by both the EU and Vietnam Since then, the two territories have been working to implement the agreement, including establishing the necessary political and legal structures Overall, the EVFTA is expected to benefit both the EU and Vietnam through increased trade and investment, the creation of new employment, and economic growth It represents a crucial turning point in the two regions' economic ties and is expected to lead to more equal and profitable commercial partnerships CURRENT SITUATION OF THE LEATHER AND FOOTWEAR EXPORTS IN MEMBERS COUNTRIES OF EVFTA 2.1 CIRCUMSTANCES OF THE FOOTWEAR INDUSTRY IN THE WORLD 2.1.1 Market Overview The growing need for fashionable, trendy, yet comfortable footwear among all age groups is a major driver of the worldwide footwear business The rise in the expansion of sportsfocused footwear, such as football, cricket, basketball, and golf, combined with exponential government and worldwide organization expenditure to encourage sports leagues and participation, has been a primary driver for the market Asian countries, such as China and India, are the leading exporters of leather footwear in the developed world The growing demand for eco-friendly footwear is a new trend in the global footwear market There has been an increase in the use of sustainable materials and sustainable footwear manufacturers that have incorporated sustainability into their brands since their inception Globally, 22.2 billion pairs of footwear will be produced in 2021 In comparison, global footwear production in 2019 was 24.3 billion pairs Asia accounts for just less than 90 percent of global footwear production This footwear is then shipped all over the world, with Germany, Japan, and France among the world's major footwear importers The United States, on the other hand, is by far the greatest importer, purchasing over 2.4 billion pairs of shoes in 2021 In comparison, Germany imported over 631 million pairs of shoes One global footwear market trend is the rising popularity of athletic footwear, which is worn not only for sports but also as part of everyday fashion The sports shoe business has grown fast over the previous decade and is estimated to be valued approximately 77 billion US dollars by 2025 In 2021, the United States again had the most income from athletic footwear, followed by China 2.1.2 Market Leaders Within the global footwear industry, there are a number of significant multinational corporations, with athletic brands widely represented, one of the most well-known being Nike With footwear category revenues of around 28 billion US dollars worldwide in 2021, Nike dominated its two direct competitors, Adidas and Puma TJX Cos was the world's top clothes and footwear retailing firm in 2021/22, with 48.6 billion US dollars in revenue Skechers had the most revenue of any specialty footwear company in 2021, at 5.9 billion euros 2.1.3 Leading Footwear Market New York and Los Angeles are among the most popular cities in the US for the clothing and footwear industry The clothing and footwear segment in the US influences the global fashion industry On the other hand, China, and Japan had a market valuation of $438 billion and $96 billion respectively in 2021, holding their position in the second and third spot globally The countries account for 23% and 5% respectively of the global market share Clothing demand in China is highly influenced by new generation shoppers who are often involved in upgrading their lifestyle Also, China has been active in various International sports events which have boosted the demand for sportswear in the region Germany and Italy, with market values of $80 billion and $69 billion, respectively, remained in fourth and fifth place India, the United Kingdom, South Korea, France, and Russia are other prominent countries with a substantial presence in retail clothing and footwear Following the pandemic COVID-19, nations around the world observed an increase in overall demand Furthermore, after nearly two years of restrictions, both brick-and-mortar and online enterprises resumed operations Furthermore, consumer spending on leisure products has surged and is anticipated to rise further in the short future as nations recover from the pandemic Nike, Adidas, Gap Inc, Louis Vuitton, and Skechers USA are among the top apparel and footwear players with a prominent presence in worldwide marketplaces Document continues below Discover more from: International Economics Đại học Kinh tế Quốc dân 268 documents Go to course Phan tich chien luoc kinh doanh habeco 45 International Economics 97% (29) Int Fin Class Problems Solution International Economics 100% (10) Chap-10-IE - Answer the question in chap 10 IE 14 International Economics 100% (5) Int Fin Class Solutions International Economics 100% (5) TỔNG HỢP CÁC CÂU HỎI PHỎNG VẤN 2020 International Economics 100% (3) Đề thi Kinh tế quốc tế (E) Nov 23, 2021 International Economics 100% (3) 2.2 BACKGROUND OF THE FOOTWEAR INDUSTRY IN THE EU The European footwear business is diversified, with a wide range of materials (textile, leather, plastic, etc.) utilized in manufacture, as well as distinctions between non-athletic and sporty footwear In general, the footwear industry is organized into three segments: manufacturing, trading, and retailing Italy, Spain, and Romania create around two-thirds of all European footwear Italy accounts for approximately half of total output This expansion highlights the significance of Italian footwear production The output value in 2017 was roughly 7.75 billion euros, up from 7.12 billion euros in 2012 As a result, it's not unexpected that Italy ranked top in Europe in terms of footwear component export value In 2016, Italy exported footwear valued around 740 million euros The footwear sector is highly competitive as well In the Netherlands, Asics Europe was the biggest footwear brand Asics made nearly 700 million US dollars in revenue in 2016, while Under Armour and Ecco made approximately 425 and 421 million US dollars, respectively In 2016, Euro Shoe Group NV was ranked first among prominent footwear companies in Belgium They made over 152 million US dollars in revenue, nearly seven million more than the second-placed Brantano NV When consumer expenditure on footwear in the United Kingdom was compared year on year, consumers spent more on footwear In 2007, spending was anticipated to be around 6.1 billion pounds However, ten years later, this figure has nearly quadrupled: annual footwear expenditure is expected to reach around 12 billion pounds in 2017 In Sweden, a similar trend was observed in household consumption expenditure on footwear 2.2.1 Contribution to the Economy of the EU In 2012, the footwear industry employed over 21 000 people, made €24 billion in revenue, and added €6.2 billion in value (almost 0.5% of total EU manufacturing) There are 280,000 people employed directly by the industry Three countries account for two-thirds of EU footwear production: Italy, Spain, and Portugal Italy produces about half of all goods The European footwear industry is made up of a large number of small enterprises, each employing 10-15 people and earning slightly more than €1 million The majority of these businesses are clustered in locations with low industrial diversity The trend in the amount (metric tons) of footwear traded within the EU12 market (intraEU) and imported from the Extra-EU zone is depicted in Figure The trend rate of growth of imports from both external and EU countries increased after the mid-1980s, but the rate of increase of extra-EU imports was faster than that of internal EU trade.3 As a result, external import penetration of the EU footwear market increased dramatically after the mid-1980s In the 1990s, the volume of footwear imported from outside the EU surpassed the volume of footwear traded within the EU for the first time Imports from outside the EU increased by 41% between 1976 and 1981 Extra-EU imports soared by 168% between 1986 and 1994, while EU output increased by 25% and local consumption increased by 43% Figure 1: EU12 Intra-EC and Extra-EC Imports of Footwear in volume (1976-98) Figure depicts import penetration as well as the export intensity ratio for each of the main EU producing countries, Italy, Germany, France, and the United Kingdom, as well as Spain and Portugal, whose shares in European output have grown since the 1980s Imports have been increasingly penetrating the Italian, UK, German, and French markets since the mid-1970s, although import penetration in Spain and Portugal increased significantly only after 1986 To examine more closely how the increase in import penetration may have influenced the structure of EU footwear production, we will look at the geographical makeup of EU imports, specifically how the share of low-wage nations has evolved Figure depicts the trend in the share of total footwear imports from the NICs (4 Asian tigers), RoA (rest of Asian countries), CEEE (Central Eastern European Economies), and RoW (rest of the World trade) from the EU12 The data demonstrate a notable increase in the penetration of imports from less-developed, low-wage nations after the mid-1980s, which + Leather footwear was clearly the most important product category, accounting for € 13,932 million, or 68% of total exports in 2006 The clothing and footwear portfolio's share is predicted to only slightly fall, creating a huge total growth potential, therefore the forecast for the fashion sector overall is still good The most significant force driving the global footwear industry is the growing significance of developing nations as consumer marketplaces as well as manufacturing hubs This suggests that manufacturers and retailers have a strong incentive to diversify their regional presence in order to support future development The athleisure trend, which mixes comfort and style and has turned utilitarian athletics into sought-after fashion statements, is also likely to persist 2.3 SITUATION OF FOOTWEAR IN VIETNAM 2.3.1 Market Overview Vietnam, one of the world's leading footwear makers, is second only to China in terms of leather and footwear exports The footwear industry is an important economic sector in Vietnam and one of the leading exporters of footwear worldwide According to the Ministry of Industry and Trade, the industry's export revenue would top $24 billion in 2020, accounting for nearly 8% of total national exports Here is an overview of the Vietnamese footwear market:  Market size: Vietnam's footwear industry is rapidly expanding and is already a prominent player on the world stage The majority of the industry's more than 2,000 businesses, which employ over million people, are located in the country's south  Export destinations: The United States, Europe, and Japan are Vietnam's major footwear export consumers, accounting for more than 70% of the country's total export value Other key markets include Canada, South Korea, and China  Production capacity: Vietnam is a large shoe producer, capable of producing more than 1.5 billion pairs of shoes every year The company sells a wide range of 11 items, from low-cost to high-end, and has been emphasizing the creation of green products  Competitive advantages: Include low labor costs, a large and well-trained workforce, and free trade relations with major economies These characteristics boost Vietnam's footwear industry as well Foreign investors looking to establish industrial firms in the region find the country intriguing due to its ideal location in Southeast Asia  Challenges: The Vietnamese footwear industry is facing a number of challenges, including rising labor costs, increased competition from other countries with inexpensive labor, and disruptions caused by the COVID-19 outbreak The industry has attempted to address these concerns by investing in automation and technology to reduce manufacturing costs and increase efficiency Overall, Vietnam's footwear sector has a bright future and is expected to grow and prosper in the coming years as a result of the country's competitive advantages and healthy export demand 2.3.2 Competitive Other low-cost manufacturing countries, particularly those in Southeast Asia, are placing pressure on Vietnam's footwear industry Vietnam's biggest footwear industry competitors include China, Indonesia, and Bangladesh These countries provide similar advantages, such as low labor costs and a large workforce, as well as significant and expanding footwear industries Because of their plentiful natural resources and low production costs, certain developing countries in Africa and South America are also becoming more competitive in the footwear sector To remain competitive, Vietnam's footwear sector has invested in automation and technology to reduce manufacturing costs and increase efficiency Furthermore, the sector 12 has been focusing on creating new markets, such as India and Africa, and producing products with higher value-added Vietnam's participation in free trade agreements (FTAs) has also helped the sector maintain its competitiveness by cutting tariffs and opening up new markets The EUVietnam FTA (EVFTA), for example, has lowered taxes on Vietnamese footwear exports to the EU, an important market for Vietnam's footwear business The footwear market is very competitive overall, but Vietnam's sector has a number of advantages that have helped it to remain so To maintain its position as the world's leading footwear exporter, the industry must continue to develop and adapt to changing market conditions 2.3.3 Supply and Demand The vast majority of Vietnamese footwear is shipped to the United States, Europe, and Japan, where it is mostly sold However, factors such as rising wages, urbanization, and altering consumer preferences have all contributed to a steady increase in domestic footwear consumption in Vietnam over the last few years 13 According to Statista, the Vietnamese footwear market will grow at a 6.8% CAGR from 2021 to 2025, with sales expected to reach $8,268 million in 2021 According to the study, the average revenue per person in the Footwear industry in Vietnam in 2021 will be close to US$84 The country's growing middle class is one of the major factors affecting the country's rising demand for footwear They are increasingly able to afford more expensive footwear and are willing to spend more money on fashion and style as more people enter the middle class and have more disposable income Furthermore, as a result of Vietnam's rising urbanization, the market for shoes is expanding When people go to cities and buy more shoes to go with different outfits and settings, they are more likely to embrace Western-style fashion trends Last but not least, the COVID-19 epidemic has had an impact on Vietnam's shoe demand Demand for more casual and comfortable shoes, such as sneakers and sandals, has shifted as more people work from home and participate in online meetings and events Overall, increased wages, urbanization, and evolving fashion trends are expected to drive up demand for footwear in Vietnam over the next few years The country's footwear industry now has the opportunity to focus more on the local market and increase sales and earnings 14 2.3.4 Economical Factors There are several factors that affect the footwear industry in Vietnam, including: Labor costs: Because Vietnam's footwear industry relies so heavily on cheap labor, rising labor costs may have an impact on the sector's competitiveness Costs may grow as minimum wage rates and labor market competitiveness rise Raw material prices: The price of raw materials like as rubber, synthetic materials, and leather may have an impact on the profitability of the footwear industry Input costs and profit margins might be affected by global price variations Currency exchange rates: The Vietnamese dong's exchange rate vs major currencies might affect the footwear sector's competitiveness in global markets While a lower dong may raise import costs, increasing manufacturing costs, a stronger dong may make exports more expensive and less competitive Trade policies: Changes in international trade legislation, such as tariffs or antidumping measures, may have an impact on the footwear sector's export competitiveness Free trade agreements may also provide opportunities for the sector to grow its exports Consumer preferences and trends: Consumer trends and tastes may cause changes in demand for footwear items, as well as the industry's manufacturing methods and product offerings 15 Technology and innovation: Advances in technology and innovation may speed up the manufacturing process, reduce prices, and improve the quality of footwear To remain competitive, the industry must keep up with new trends and advancements Environmental and sustainability concerns: Consumers are increasingly concerned about the environment and sustainability; as a result, businesses must respond by introducing sustainable production techniques and reducing their carbon impact Overall, the Vietnamese footwear industry is influenced by a number of internal and external factors To ensure long-term viability and growth, the sector must be proactive in addressing these concerns SWOT MODEL ANALYSIS 3.1 Strengths: - Vietnam has a huge and inexpensive labor force capable of producing high-quality leather and footwear at affordable costs Vietnam has a population of about 100 million people, and its workforce is youthful and plentiful The average monthly income in the leather and footwear sector is around $200, which is lower than in China, India, Bangladesh, or Indonesia Vietnam also has a legacy of workmanship and competence in creating leather and footwear that meet international quality and design requirements This provides Vietnam with a cost advantage over other countries, allowing it to produce a huge amount of footwear for export According to the Vietnam Leather, Footwear, and Handbag Association (LEFASO), Vietnam's footwear exports will exceed $20 billion in 2022, making the country the world's second-largest footwear exporter behind China - A product portfolio that is diverse enough to fulfill the demands and tastes of different customers in the EU market Sports shoes, casual shoes, sandals, slippers, boots, bags, suitcases, belts, wallets, and other leather and footwear products are manufactured in 16 Vietnam These products can cater to many client segments in the EU market, such as men, women, children, the elderly, and others, who have varying tastes, styles, and functions.- Long-term connections with key EU importers such as Germany, France, Italy, Spain, and others For more than two decades, Vietnam has exported leather and footwear to the EU market It has earned the trust and reputation of several prominent brands and retailers in the EU, including Adidas, Nike, Puma, Zara, and H&M These importers account for a sizable portion of Vietnam's leather and footwear exports to the European Union - A geographically advantageous location and transportation infrastructure that enables trade with the EU Vietnam is located in Southeast Asia, adjacent to other important manufacturing centers such as China and India It also boasts a vast coastline with numerous seaports that connect to various parts of Asia and Europe Vietnam has invested in modernizing its transportation infrastructure, such as roads, railroads, and airports, in order to facilitate goods transit and lower logistical costs - Vietnam has a good reputation for creating high-quality footwear products for major worldwide brands, particularly sports shoes Many renowned footwear manufacturers, including Nike, Adidas, Puma, and New Balance, have built long-term collaborations with local suppliers and invested in technology and innovation in Vietnam Vietnam's footwear products are well-known for their high quality, design, and durability, attracting clients from all segments and locations - Vietnam has negotiated a number of free trade agreements (FTAs) that grant it preferential access to key markets such as the EU, the United Kingdom, Japan, and the United States These free trade agreements (FTAs) decrease or eliminate tariffs and nontariff obstacles for Vietnam's leather and footwear exports, opening up new potential for market expansion and diversification The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), for example, encompasses 11 nations accounting 17 for 13% of world GDP and 15% of global commerce After Brexit, the UK-Vietnam Free Trade Agreement (UKVFTA) maintains the benefits of the EU-Vietnam Free Trade Agreement (EVFTA) - The EVFTA eliminates practically all taxes on leather and footwear products supplied from Vietnam to the EU, giving Vietnamese exporters a competitive advantage over other countries With a population of over 500 million people and a per capita income of more than $40,000, the EU is one of the largest and most lucrative markets for leather and footwear products The EVFTA also includes preferred rules of origin for Vietnamese footwear, which means they can benefit from tariff reductions if they use components from Vietnam or other EVFTA members 3.2 Weaknesses: A reliance on imported raw materials, particularly leather, which accounts for 60-70% of production costs and decreases profit margins Vietnam lacks an adequate domestic supply of leather and other materials such as rubber, plastic, cloth, and so on that are required for the manufacture of leather and footwear items The majority of these materials must be imported from other nations such as China, India, Brazil, Argentina, and so on As a result, Vietnam is sensitive to price and supply variations, as well as taxes, quotas, or technical standards imposed by exporting countries Other countries with cheaper production costs and larger local markets, such as China, India, Bangladesh, and Indonesia, will face stiff competition These countries are also significant exporters of leather and footwear to the EU market They benefit from economies of scale, technology, innovation, branding, and other factors that allow them to offer cheaper and better products than Vietnam They also have larger internal markets that can absorb excess output, reducing their reliance on exports A lack of market knowledge, product innovation, and branding initiatives to boost its value-added and competitiveness in the EU market Vietnam lacks reliable and timely 18 data on customer preferences, trends, rivals, rules, and possibilities in the EU market, which is huge and diverse, with various client segments, tastes, and standards This limits Vietnam's capacity to respond to changing market demands and develop higher valueadded products and services for EU clients Vietnam also does not invest enough in research and development, design, and technology to create new or enhanced products and services that can separate itself from competition Most businesses concentrate on processing and exporting for international brands, limiting their originality and distinction The sector is also having difficulty hiring and maintaining talented workers and designers Vietnam also lacks effective branding strategies for developing and promoting its own brands or trademarks in the EU market Most businesses not have their own brands or trademarks, nor they invest in marketing and promotion The industry also lacks government and industry association help in developing national and regional brands There is a gap in the supply chain from raw materials to final goods Most businesses are solely involved in the last stages of processing and exporting for international brands FDI enterprises account for 80% of industrial output value and 78.6% of industry export value Vietnam lacks a solid relationship between various phases of the supply chain, such as material production, product design, manufacturing, distribution, retailing, and so on This reduces the industry's efficiency, quality, and flexibility Vietnam is likewise having trouble locating domestic providers of high-quality, dependable raw materials 3.3 Opportunities: Because the leather and footwear industry contributes significantly to the Vietnamese economy, accounting for around 17% of overall commerce, joining EVFTA will provide considerable potential for the industry  Access to a large market Vietnam's leather and footwear industries will have tariff-free access to the European Union's (EU) market of over 500 million people from over 27 nations across the EU, 19 which is valued over 18 trillion dollars This will boost the industry's competitiveness in the global market  Lower input cost The EVFTA will lower import duties on raw materials and machinery used in the leather and footwear industries This will lower input costs and make Vietnamese products more competitive on the global market  Improved quality standards and Technology transfer: The EVFTA compels Vietnam to meet the EU's high product quality, safety, and environmental protection standards This will aid in the improvement of the quality of Vietnamese leather and footwear Tariff-free market access would also increase European companies' interest in investing in Vietnam's leather and footwear industries, bringing new and advanced technology and skills to help modernize the industry's manufacturing processes and product quality  Export growth: Prior to the adoption of the EVFTA, Vietnam had preferential tariff status (GSP) for footwear, with a tax rate that was 3.5% lower than the 12.5% basic tax rate The EVFTA's effectiveness creates opportunities for export expansion to EU nations According to a European Commission analysis, the EVFTA is predicted to increase Vietnam's exports to the EU by roughly 42% by 2025 Because the EVFTA tariff preferences are constant independent of the amount of total imports into the EU and gradually decline to 0%, Vietnamese enterprises will benefit considerably in the long run Furthermore, the applicable laws of origin are essentially unchanged, which is a big benefit for Vietnamese shoe manufacturers As a result, when exporting to the EU market, shoes are typically an export product with high C/O levels and recommended C/O usage Furthermore, Vietnam's footwear sector benefits from the 20 majority of countries exporting footwear to the EU that not currently have an FTA with the EU 3.4 Threats  Competition After China and India, Vietnam is now the world's third-largest footwear exporter As a result, the industry will face competition from other nations with duty-free access to the EU market, such as China and India This will put more pressure on Vietnamese enterprises to enhance product quality and reduce costs In 2020, China shipped over $12 billion in footwear to the EU, while India exported approximately $3 billion in footwear 21 to the EU While Vietnam's footwear exports to the EU in 2020 were valued at around $4.98 billion USD, it demonstrated the three nations' competitiveness in this industry  Compliance Cost Meeting the EU's stringent standards for product quality, safety, and environmental protection will necessitate investments in new technology and compliance with laws, raising their compliance costs According to a research conducted by the European Chamber of Commerce in Vietnam, around 40% of Vietnamese enterprises are not currently in compliance with EU environmental rules  Intellectual property rights The EVFTA mandates Vietnam to defend the intellectual property rights of EU companies doing business in Vietnam, which may raise the cost of doing business for Vietnamese enterprises that rely on counterfeit goods  Non-tariff barriers Even if Vietnamese leather and footwear products have tariff-free access to the EU market, they may encounter non-tariff barriers such as technical standards, labeling requirements, and sanitary and phytosanitary procedures, which can raise costs and diminish competitiveness RECOMMENDATION AND SOLUTIONS  Increase competitiveness and productivity: Vietnamese businesses may boost their competitiveness and productivity by investing in training and capacity-building programs, using best practices in production and management, and fostering an innovative and entrepreneurial culture  Invest in technology and innovation: Vietnamese businesses can invest in technology and innovation to increase product quality and meet EU environmental and safety regulations This can help them compete more successfully in the EU market and, in the long term, decrease compliance costs 22  Improve supply chains: Vietnamese businesses can endeavor to improve their supply chains and create stronger ties with suppliers, distributors, and customers in the EU market This will enable them to better understand market trends and consumer preferences, allowing them to produce more competitive products that fit the demands of EU customers  Concentrate on value-added items: Vietnamese businesses can concentrate on producing better-value-added products such as personalized and sustainable footwear, which can fetch higher pricing and margins in the EU market They can also differentiate their products by focusing on quality, innovation, and sustainability in their branding and marketing tactics  Protect intellectual property rights: To avoid legal problems and keep the trust of EU clients, Vietnamese enterprises can protect their own intellectual property rights and comply with EU intellectual property legislation  Increase cooperation and collaboration: Vietnamese companies can increase cooperation and collaboration with EU companies, industry associations, and government agencies to learn from their experience and best practices, as well as to address common trade, investment, and sustainability challenges  Market intelligence and promotion: Vietnam should invest in market intelligence to better grasp the European market's developing trends, tastes, and expectations This information can assist Vietnamese exporters in customizing their products Furthermore, good marketing and promotion activities may enhance awareness and demonstrate European buyers the quality and distinctiveness of Vietnamese leather and footwear items 23  Government assistance: The Vietnamese government should provide comprehensive assistance to the leather and footwear industries, such as cash incentives, export promotion programs, and simplified administrative procedures This assistance can assist businesses in navigating the difficulties of international trade while also increasing their competitiveness in the European market REFERENCE "Vietnam's Footwear Industry," Vietnam Briefing, August 2021 https://www.vietnam-briefing.com/news/vietnams-footwear-industry.html/ "Vietnam’s shoe industry ready for EVFTA opportunities," Vietnam Economic Times, August 2020 https://vietnamtimes.org.vn/vietnams-shoe-industry-readyfor-evfta-opportunities-23357.html "The EU-Vietnam Free Trade Agreement: Benefits for Europe," European Commission, 12 February 2020 https://ec.europa.eu/trade/policy/in-focus/euvietnam-free-trade-agreement/ "Vietnam’s leather and footwear industry to benefit from EVFTA," The Voice of Vietnam, 30 June 2021 https://vovworld.vn/en-US/news/vietnams-leather-andfootwear-industry-to-benefit-from-evfta-1000761.vov "What Is The EVFTA And How Will It Impact Vietnam?" Vietnam Insider, 16 June 2021 https://vietnaminsider.vn/what-is-the-evfta-and-how-will-it-impact- vietnam/ "EVFTA: Opportunities for Vietnam’s leather and footwear industry," Vietnamnet, 11 November 2020 https://vietnamnet.vn/en/business/evfta-opportunities-forvietnam-s-leather-and-footwear-industry-688582.html Market value in billion U.S dollars https://www.statista.com/topics/4571/global- footwear-market/#topicOverview 24 https://www.statista.com/chart/13470/athletic-footwear-sales/ https://www.worldfootwear.com/news/all-the-facts-and-numbers-of-the-footwear- industry-in-2021/8152.html 10 https://www.globaldata.com/data-insights/retail-and-wholesale/top-10-countries- in-retail-clothing-and-footwear-segment-by-market-size/ 25