Based on these figures, the country’s shoe exports for December are projected to earn between US$300-US$400 million, making an annual total of almost US$4 billion, much lower than the projected target of US$4.7 billion.

When explaining the situation, an official from the ministry said that the sector has faced stiff competition from Brazil, India, Bangladesh and Cambodia. Many investors have also moved their operations to Cambodia as the country has been granted the EU’s General System of Preference (GSP) and does not pay anti-dumping taxes on its leather-capped shoe.

Diep Thanh Kiet, deputy chairman of the Vietnam Leather and Footwear Association (Lefaso) said that Vietnamese leather shoes have been subject to an EU anti-dumping tax of 10 percent since 2007.

At the beginning of this year, the EU removed the industry from its GSP, resulting in the export tax rising to 16 percent, in the market that makes up 75 percent of the sector’s total export turnover.

According to financial analysts, with this level of tax, the country’s leather export turnover will drop by at least 30 percent.

In this context, the increase demand in the domestic market is the silver lightning in the cloud downturn but the difficulties that hampered the sector’s development will continue to pose a huge challenge next year.

With an export turnover of US$4.8 billion last year, the Vietnamese shoe industry now ranks fifth in the world. There are currently over 500 shoe manufactures operating in the country, generating jobs for nearly 600,000 workers a year.