VN textile and garment to enjoy good growth in exports without TPP

Vietnam’s garment and textile sector which is forecasted to benefit greatly from the Trans Pacific Partnership (TPP) is still enjoying good growth in exports to the US market even without TPP. Holding the second biggest market share in the US and Japan, according to Le Tien Truong, Director General of the Vietnam National Textile and Garment group (Vinatex).

The two countries US and Japan are also the two main export markets of Vietnam’s garment and textile. In 2017, Vietnam’s textile-garment sector aims for a growth rate of 7-8 percent, and 30 billion USD in export earnings. According to Truong, the TPP only provides one more favourable condition for exports.

Vietnam’s enterprises in the garment and textile sector have continuously made investment in machines and technology to improve their productivity, reduce cost, thus increasing their competitiveness in the two markets.

Truong Van Cam, Vice Chairman of the Vietnam Textile and Apparel Association (VITAS) highlighted potential for Vietnam’s garment and textile export in other markets, including the US.

Apart from TPP, Vietnam has signed and will sign a dozen of free trade agreements (FTAs), therefore, the US’s withdrawal from the TPP will not affect the sector.

According to Cam, Vietnam attracts investors with an open economy, a favourable business climate and tax incentives from the World Trade Organisation (WTO) and FTAs with EU, Japan, and the Republic of Korea.

Echoing Cam’s view on the role of the US in TPP, Nguyen Xuan Duong, Chairman of the Board of Directors of the Hung Yen Garment Joint Stock Company, said Vietnam’s exports of garment and textile to the US will not change much without TPP.

At the same time, the Vinatex General Director Le Tien Truong was of the opinion that when the TPP may not be realized, there are possibilities that investors will suspend their investment decision. Therefore, the investment flow in the sector will slow down during 2017-2018 in comparison with the 2013-2014 period.

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