In spite of these new chances, local businesses face a number of challenges to meet the rules of origin and regulations on labour and environmental standards that have been set by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
According to the Vietnam Association of Craft Villages, Vietnam is currently home to 5,411 craft villages, of which 115 traditional crafts are practiced at over 2,000 craft villages nationwide, generating jobs for approximately 1.5 million people.
During a recent international seminar on the sustainable development of the fine arts and handicraft industry, Asso. Prof. Dr. Dang Mai Anh, Vice Principal of the Hanoi University of Industrial Fine Arts, said the number of households producing fine art and handicraft products in rural areas has increased by between 8.8 per cent and 9.8 per cent while production value has also risen by 15 per cent annually in recent years.
Asso. Prof Dr. Dao Ngoc Tien of the Foreign Trade University believed that there is plenty of room for local handicraft products to penetrate new markets that have signed up to the CPTPP, including nations such as Japan, Canada, Peru, and Chile.
Asso. Prof. Tien noted that the country’s fine arts and handicraft products will enjoy lower tariffs when exporting to CPTPP countries as tariffs on several goods are set to be slashed to zero per cent.
Despite this, products will have to comply with stringent rules of origin in order to gain easier access to these lucrative markets. In comparison with other Free Trade Agreements (FTAs), the CPTPP has set out stricter requirements in terms of intellectual property, industrial design protection, along with non-tariff measures such as regulations on food and safety in order to protect the health of consumers and the environment.
Ms. Ha Thi Vinh of the Quang Vinh Ceramic Co, Ltd stated her worries that exports to CPTPP countries face additional pressure as firms now have to navigate more laws and regulations when creating products with unique cultural characteristics. For example, products should not utilize the labour of children during production and should not pollute the environment.
It is thought this will pose a challenge to many domestic enterprises, as most households and businesses operating at craft villages on a small scale. Therefore, it is difficult for them to meet all the regulations stipulated in the CPTPP.
Moreover, Vietnamese products still lack creativity and feature poor designs when branching out to an international market, while handicraft producers have not paid due attention to the development of brands.
In order to cope with these difficulties, Ms Vinh proposes that the Government, along with the Ministry of Industry and Trade, provide support to businesses across the nation’s craft villages by strengthening connectivity among input material suppliers nationwide. This will allow them to have sufficient material necessary to create items that meet the rules of origin in line with the CPTPP.
There should be a big push by the Government, relevant agencies, and associations to make a concerted effort in a bid to raise households’ awareness at craft villages about obeying the regulations when looking to export to CPTPP countries.
EIchi Hasegawa, an expert in the fine arts and handcraft industry from Japan, said Vietnam’s fine arts and handcraft exports to CPTTP countries still makes up a small proportion in comparison to the country’s total export turnover.
Therefore, there remains enormous potential for Vietnam’s fine art and handcraft products in the Japanese market, particularly as the number of tourists to Japan has been increasing three-fold each year.
In addition, local firms have been advised to participate in trade fairs and exhibitions as a means of seeking potential distributors and new buyers, whilst also putting forth a list of their best product designs and distributors in order to establish a long-term relationship with buyers.
Businesses have also been urged to pay close attention to the scale of their orders and contracts, whilst also selecting major events in Japan such as the Tokyo Olympics in order to introduce their products.