When the EU – Viet Nam Free Trade Agreement comes into effect, Viet Nam's handicraft products cannot enter the EU market if they do not meet requirements in traceability. Local businesses face difficulties in implementing traceability for their products because the material supply chain has too many small suppliers and households who have no valid input invoices.
Viet Nam has few suppliers of chemicals and materials with certificates in the supply chain of the handicraft industry. The suppliers have too many commodities and diversified manufacturing processes so they also face difficulties in the following traceability.
The handicrafts are not essential goods, but the demand for these decorative products is increasing in developed countries. The global market has a huge demand for handicrafts, worth a total of US$100 billion, and the annual export turnover of handicrafts in Vietnam is about USD2.3 billion, accounts for only over 2 percent. At present, the Government aims to develop the national traceability system. This is a great policy but the system may take 5-7 years to develop. Therefore, the handicraft export enterprises could not take advantage of the EVFTA.
Meanwhile, Vietcraft, the sector’s representative, has encouraged local enterprises to systematise the supply chain from communes. This way forces enterprises to reorganise the material supply system. Local enterprises need to have enough knowledge about this issue according to the market demand. That would help them boost handicraft exports to other countries, especially to the EU that has strict requirements. Viet Nam has exported its handicraft products to 163 countries and territories worldwide, including rattan and lacquer products.
However, the handicraft export value to the EU market has been low, of which the export value to Germany accounts for 8 per cent of the total and 7 per cent to France. Therefore, Viet Nam has great potential in exporting handicrafts to the European market.