Vietnam garment and textile export target set at US$28 bn within reach this year

Vietnam has been the second largest exporter of garment and textile products to the U.S. for the last several years. The annual export turnover from Vietnam to U.S. market has grown 12-13 percent in recent years while the North American nation’s import value has grown only 3 percent. These achievements were partly due to influences from free trade agreements.

With the negotiations of Trans-Pacific Partnership (TPP) and other free trade agreements (FTA) having done and they are going to be signed this year, experts are of view that there is an opportunity for the garment and textile industry to maintain its export growth momentum and obtain a turnover target of US$28-28.5 billion this year.

Last year the garment and textile export turnover reached nearly US$24.5 billion, an increase of 16 percent over 2013. Garment items brought US$21 billion up 17 percent while fibre products yielded US$3 billion.

The export turnover to U.S. market grew 12.5 percent , 17 percent to the EU and remained unchanged at 9 percent to Japan.

According to experts, these agreements will make the garment and textile industry’s export target accessible this year because they are directly related to the main export markets of Vietnam, for instance TPP with the U.S. and Japan and FTAs with the EU, South Korea, and the Customs Union of Russia, Belarus and Kazakhstan.

When the Vietnam-EU FTA is signed, the tariff rate will drop l from 12 percent to 0 percent. Similarly, the TPP agreement will abolish U.S. tariff rates of 17-18 percent.

Despite of the above advantages, experts feels that Vietnam might face difficulties in getting the export turnover target as the material source of garment and textile industry is largely dependent on import.

Ms. Raffaella Carabelli, chairwoman of the Association of Italian Textile Machinery Manufacturers, said that besides diversifying the export markets businesses should reduce the reliance on import material sources for successful integration.

The Vietnam Association of Garment and Textile’s deputy chairmen, Le Tien Truong sharing the same view said that businesses need to start investing in material production, link fibre production with cloth production and garment making to improve the supply chain. They should also quickly change from processing with high material import ratio into all-in production to meet customers’ demand and increase the added value of their products, until the agreements are signed and take effect as localization rate increase is one of factors helping businesses improve their competitiveness and products’ added value.