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Textile and garment exports in 2015: promising outlook PDF Print
Tuesday, 03 November 2015 08:29

VIETRADE - During 2011-2015, Vietnam's textile and garment industry has exported a USD 106 billion worth volume of garments, fibers and fabrics to various large markets in the world such as: the US, EU, Japan, Korea and ASEAN...


Updated statistics by the General Department of Customs showed that the total export value of Vietnam's textile and garment in the first 9 months hit nearly USD 17 billion, out of which the US accounted for up to 50%.


Specifically, statistics showed that export value to the US market in the past 9 months was USD 8.33 billion, up 13.6% compared to the same period of last year. The US has also been Vietnam's largest garment and textile export partners with growth rate higher the average growth rate across the industry (growth rate across the industry in the first 9 months was only 10%).


In the following places are Japan and Korea with 9-month export value of USD 2.03 billion and USD 1.54 billion, up 6% and 0.6% respectively in comparison with the same period of last year.


Industry specialist forecasted a promising outlook for Vietnam' export in the coming years thanks to the huge impacts of about- to -be -signed free trade agreements (FTA), especially the Transpacific partnership agreement. (TPP)


Incentives on tariffs brought about by TPP have been the favorable conditions for enterprises to expand their market share in the US and Japan, judged by the industry specialists and enterprises. Vietnam's garments and textile exports to the US are subjected to 17-30% taxation, which will decline towards 0% once TPP takes effect.


In the past few year, export value of the industry to the US market continued enjoying 12-13% growth rate, while the US's imports from all other countries increased only 3%, which means Vietnam's market share in the US is expanding. Moreover, exports from Vietnam contribute only 9% in the US's total garment and textile import value.


Vietnam's total garment and textile export value during 2011-2015

Unit: million USD


Export value









Estimates for 2015





On the other hand, the industry has expanded its market in terms of scale with other trading partners like the EU. Export from Vietnam only account for a tiny proportion of the EU's total import value. Besides, once Vietnam-EU FTA takes effect, the current 12% taxation will be reduced to 0%, bringing about favorable conditions for garment and textile exports to this market, and the EU will continue to be Vietnam's key exporting market in the years to come.


Similarly, with the coming Vietnam-Korea FTA and the Vietnam-Eurasia Economic Alliance FTA, Vietnam's garment and textile industry is standing at the threshold of gigantic opportunities in further integrating in the international market.


Exports to Russia market are subjected to very high tax rate, depending on weight per unit. FTA between Vietnam and the Customs Alliance (Russia, Belarus and Kazakhstan), which is to be signed in the early 2015 will dramatically change the current policies on tariffs and customs, attracting enterprises' interest.


However, favorable conditions are accompanied with challenges, especially those conditions set out by TPP on the origin of the commodities, according to which, exporting enterprises have to use fabrics and fibers manufactured within TPP countries so as to promote the development of supply chains and investment into the industry.


What is more, the biggest challenge for the industry is its dependency on the imported raw materials. Statistics by the Ministry of Trade showed that 50% of the industry's raw materials are imported, mainly from China.


As China does not join TPP, Vietnam therefore has to reduce its dependence on textile materials from this country to be entitled to preferential tariff treatment when exporting to the US market.


With Vietnamese enterprises working at the garment stage, low added value, modest capital and out of date technologies are considered the obstacles preventing them from competing in terms of productivity, quality, price and likely turning them into contractors for FDI enterprises.


According to analysts, TPP brings about benefits for investors in textile, dying when investing into Vietnam to embrace TPP's favorable tariffs. Besides, enjoying tax incentives, garment and textile enterprise also indirectly benefit from the increasing outsourcing orders by foreign enterprises.


Statistics by VITAS showed that out of the 3,000 garment and textile companies across the countries, FDI enterprises take up nearly 25%, contributing more than 60% of the total export value. Most of these FDIs are expanding production in response to the increasing export demand.


Pursuant to the implementation tasks for 2011-2015 and forecast of the opportunities and challenges brought about by FTAs, TPP, together with the transition of the world garment and textile supplies, Vitas has set the target for the period 2016-2020 with an average growth rate of 11.5%.


In 2015, garment and textile export is expected to hit USD 27.5 billion. In 2016, the target is raised up to USD 31 billion and by 2020, the figures is expected to reach USD45-50 billion. Total employees in the industry by the end of 2015 was 2.5 million people and by 2016, this number is expected to increase to 2.8 millions and 3.3 millions in 2020.

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