Enhanced shoe and leather testing ‘afoot’ in Vietnam

The implications are that large transnational exporters of primary goods will most likely be the main beneficiaries of the trade deal, while the domestic sector of some segments of the Vietnam economy may suffer due to increased competition.

One key area of contention that specifically – shoe and leather makers – will face concerns their compliance with EU consumer protection laws, said Rachel Garwood, at a recent forum in Hanoi.

Ms Garwood, who is the director of the Institute for Creative Leather Technologies, a research and education centre based at the University of Northampton said the key issue is commercial.

Vietnam shoe and leather exporters want to be able to expand their sales to consumers in the EU and there will be no way for them to accomplish that goal without complying with a considerable amount of EU law.

This is a fact of life that Vietnamese companies must come to terms with, she cautioned, adding that is in their best interests to keep in line with EU consumer law to the fullest extent possible.

She noted that customer and consumer demands in the EU are driving up standards in the footwear and leather supply chain, presenting the industry in Vietnam with a range of challenges if they are to become competitive, profitable and sustainable.

Customers in the EU are increasingly demanding products that are not only safe and of good quality but also manufactured in an environmentally and socially responsible manner.

The EU, she emphasized, shifts the burden to the shoe and leather exporters to demonstrate the quality and safety of products through professional testing for a vast array of requirements— materials test, flammability tests, electrical safety tests and electromagnetic compliance tests to name just a few.

Phan Thi Thanh Xuan, secretary general of the Vietnam Leather Footwear and Bag Association in turn told the conference attendees that government regulators currently do not have a comprehensive set of consumer safety laws and inspection requirements in place.

The fact that the shoe and leather industries are highly dependent on foreign raw materials just makes it more difficult for cobblers and leather goods makers in the industry to cope with the quality and safety concerns of the EU regulators.

The EU regulators will not accept lab results from Vietnamese testing centres, she noted, adding that to the extent current Vietnamese law requires testing, those tests are just a waste of time and money when it comes to exports to the EU.

Vietnam labs are also ill equipped to properly perform testing, she acknowledged, saying they can only test for a few illicit chemicals in leather, while there are 163 chemicals for which the EU requires testing.

Vietnam shoe and leather exporters are now required to send samples of product to overseas labs. Currently, about 1% of every dollar of revenue goes towards inspections, but in the future, that cost certainly will rise.

Nguyen Bich Thuy from the Thuong Dinh Footwear Ltd Co, said his company usually sends its samples overseas for testing before producing bulk orders. However, more testing will be required when the trade agreement with the EU comes into force.

A representative of Ladoda Production, Service and Trading Leather Products Company, said his company currently spends on average US$10,000 annually on lab testing, but fully expects that figure to grow exponentially when the EU trade agreement is ratified.

It’s the vision of his company, said the rep, to become a driving force in the leather and shoe business in the EU and they fully recognize the need to boost expenditures on laboratory testing to up their competitiveness in the market.