Vietnamese textile and garment exports earn US $ 12.5 billion in first five months of the year 2018 between Jan-May. The first quarter of the industry showed a 15.4 per cent increase over the same period in 2017. It expects to reach an export value of US $ 35-35 billion in the year 2018 with a growth rate of 10 per cent.
The free trade agreements and technology are the major growth drivers of the textile and garment export industry. Vietnamese exporters are gaining the benefit of the bilateral and multilateral Free Trade Agreements that gives them access to new markets against the effect of growing trade protectionism. Also, the rising labour cost in China is pushing buyers to other countries like Vietnam, Bangladesh, and Cambodia.
New Free Trade Agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and Vietnam-EU FTA are pushing the local manufacturers to develop a strong supply chain to increase their product competitiveness. However, new markets supporting the trade and pushing Vietnam in a new direction is not all that it would take. They would also need to invest in Industry 4.0 technology to increase quality and productivity to be competitive as also to get an edge over other markets.
Vietnam Textile and Apparel Association predicts industry’s export value will reach the US $ 50 billion by 2020, production capacity to grow by 12-14 per cent while export potential will annually grow by 15 per cent. Looking forward, though exports are predicted to grow, the industry on the whole needs to invest in training and technology to remain competitive and focus on value addition to their products.
