Indonesia wants to compete with Vietnam in footwear exports to the EU

Indonesia wants to soon have a trade agreement with the EU to compete with Vietnam, especially in footwear exports, the country's minister said.

Indonesia's Coordinating Minister for Economic Affairs Airlangga Hartarto said Vietnam now has a free trade agreement with the European Union (EVFTA), something the country has been eyeing for many years.

The EVFTA has eliminated 99% of tariffs, paving the way for many goods, especially Vietnamese footwear, to enter the European market.

"Our footwear faces a 20 percent import tax when exported to Europe as well as the United States, while our competitor Vietnam enjoys zero tax," Minister Airlangga said at the Investors Roundtable in Cirebon (a city in southwestern Indonesia) on Wednesday.

The EVFTA Agreement between Vietnam and the EU took effect in 2020. Footwear is one of Vietnam's main export items to this market.

The Observatory of Economic Complexity (OEC) ranked EU members Germany and Belgium among the top 5 footwear export destinations for Vietnam in 2021. Vietnam's total footwear export turnover this year reached 19.9 billion USD. The OEC said that Indonesia's footwear exports were only a fraction of Vietnam's. In 2021, the country exported 5.8 billion USD, of which the export value to Germany and Belgium was 505 million USD and 284 million USD, respectively (Vietnam's was 1.04 billion USD and 722 million USD).

Indonesia has been negotiating the Comprehensive Economic Partnership Agreement (CEPA) with the EU since 2016. The two sides have concluded the 16th round of negotiations and will hold another meeting next month. The government is keen to conclude the CEPA negotiations this year. "This is a very important trade agreement to open up market access," Airlangga said.

Duc Minh ( according to Jakartaglobe )

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