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Trade pact to help Vietnam textile and garment sector expand into major market

YarnsandFibers News Bureau 2014-07-09 18:00:00 – Vietnam

The Vietnam National Textile and Garment Group’s (Vinatex) deputy general director, Le Tien Truong during the conference in Ho Chi Minh city held to discuss the group’s public offering state that there is a growth witnessed in the garment and textile sector, its clothing exports have grown more than 15 percent annually since 2001 while the garments make up over two percent of global market share.

 

Exports to major markets like the US and Japan has gone up by around 25 percent, despite a drop in their overall garment and textile imports. Vietnamese garment and textiles now enjoy a nine-plus percent segment of the US market, compared to 3 percent six years back.

 

While, the Vietnam's segment of the US clothing market has move up from 8.38 percent in 2013 to 9.37 percent during the first four months this year, according Vietnam Textile and Apparel Association (VITAS).

 

Export revenues from the US market in the first four months this year increased by more than 15.5 percent year-on-year to more than US$3 billion, the largest per-country gain, according to Otexa figures.

 

US imports from China, the country's major source of yarn, increased only 0.68 percent in value and 5.43 percent in volume to $11.4 billion, but China’s segment of the US market dropped from 39.79 percent to 34.93 percent.

 

VITAS also released figures showing that Vietnam is the second biggest garment and textile exporter to Japan in terms of revenues, after China. Vietnam's share in Japan's garment and textile market increased from 6.74 percent last October to 7.62 percent in the first quarter of the year, while China’s slid from 71 percent to 66.55 percent.

 

Exports to Japan grew the most: hitting 40.52 percent in terms of volume and 32.45 percent in terms of value, according to the association. Vietnam's share in the European Union market also shot up, although modestly, from 2.61 percent in September 2012 to 2.7 percent the first four months this year, whereas China's segment narrowed from 41.94 percent to 34.36 percent.

 

These figures reflect the competitiveness of Vietnam’s textile and garment sector, as well as the big space for it to grow said - Le Tien Truong, deputy general director of Vietnam National Textile and Garment Group (Vinatex).

 

According to the figures from the General Statistics Office, Vietnam exported more than $8.4 billion in textiles and garment by June 15, up 18.5 percent from the same period last year.

 

The US and Japan consume more than 60 percent of Vietnam’s textiles and garment exports, this is likely to see turning into bigger value when the Trans-Pacific Partnership Agreement negotiations concludes, Truong said.

 

The TPP will include 12 countries and cut US tariffs on Vietnamese garment and textiles from over 17 percent to nothing.

 

But the bigger changes are in store from the Vietnam-EU Free Trade Agreement, which is expected to come into effect in 2015.

 

The US imports $100 billion of textiles and garments a year (the EU $140 billion) and Vietnam makes just two percent of them.

 

Vietnam is also likely to sign a free trade agreement this year with the Customs Union (Russia, Belarus and Kazakhstan), which imports $15 billion of garments and textiles a year, less than $300 million of which come from Vietnam.

 

Vietnam’s garment and textile sector has started expanding into major overseas markets and is likely to do even much better after several free trade pacts are finalized.

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