Vietnam’s handicraft products are mostly low- and middle-grade products fixed at reasonable prices. Since Vietnam became a WTO member, declined duty levied on the country’s exports is an advantage for handicraft exports.

Valued craft items from Vietnam include wooden furniture, porcelains, lacquers, embroidery, candles, jewelry, imitation flowers and glass products. Although the export turnovers from the handicraft industry cannot compare to other industries such as oil and gas or textile, handicrafts have an advantage of low overall production costs.

Nowadays, handicraft production is the major activity of over 2,000 trade villages throughout the country with around 1.4 million households and 1,000 enterprises engaged in production or export directly. Unlike other sectors, for instance the apparel industry which relies on imported materials, handicraft manufacturers can develop adequate supplies of local materials. Local materials have met up to 95-97% of materials needed for exports. This is also an advantage for the development of this sector.

According to the Ministry of Trade and Industry, Vietnam’s handicraft has been exported to 136 countries and regions with annual export growth reaching over 20%. Major export markets for Vietnamese handicraft are Japan, the US, the EU, Russia and some ASEAN countries. Canada, Middle Eastcountries and new EU members are also the potential markets for Vietnamese handicrafts.

The handicraft sector has set an ambitious plan to export US$1.5 billion worth of handicraft products by 2010 with an annual export growth rate of over 20 percent, create 300,000 new jobs annually in rural areas, and increase income from handicraft production 2-4 times as high as that from agricultural production.

Table 1: Handicraft export value from 2005 to 2010 (USD million)

Source: Vietnam Trade Information Center

However, Vietnam’s handicraft makers are facing difficulties competing with China, Thailand and other ASEAN countries in terms of prices and design. Vietnamese companies also lack experiences in accessing foreign markets and capital because most of handicraft enterprises are small ones.

Therefore, Vietnam’s handicraft enterprises are advised to be more professional in designing and using unique materials to go farther on international markets. They have also been warned of guaranteeing delivery time and maintaining product quality, as well as strengthening market information access and trade promotion.

In order to reach the target, the Vietnam Trade Promotion Agency (Vietrade) in co-ordination with the International Trade Center has implemented a project to support trade promotion and export development with a greater focus on handicraft exports. The project has assisted the sector work out a plan to develop sources of raw materials and acquire the latest processing technology.