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Vietnam's garment sector set to balloon following trade pactsThursday, July 10, 2014 > 08:25:31
Vietnam’s garment and textile sector has been expanding into major overseas markets and will do even better after several free trade pacts are finalized, according to industry insiders.
Le Tien Truong, deputy general director of the Vietnam National Textile and Garment Group (Vinatex), said clothing exports have grown more than 15 percent annually since 2001--some years saw over 30 percent growth.
Vietnamese garments make up over two percent of global market share, Truong told a reporter at Thoi Bao Kinh Te Saigon during a Friday conference in Ho Chi Minh City held to discuss the group's public offering.
He said exports to major markets like the US and Japan rose 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 ago, he said.
Vietnam's segment of the US clothing market went from 8.38 percent in 2013 to 9.37 percent during the first four months this year, according to a post published on the Vietnam Textile and Apparel Association (VITAS) website over the weekend that drew on figures released by the Office of Textiles and Apparel of the US Department of Commerce.
Export revenues from the US market in the first four months this year rose 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 rose 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, Thoi Bao Kinh Te Saigon reported.
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 slice of 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.
Truong said the figures reflect "the competitiveness of Vietnam’s textile and garment sector, as well as the big space for it to grow." [Rising market segment rates] reflect the competitiveness of Vietnam’s textile and garment sector, as well as the big space for it to grow." -- Le Tien Truong, deputy general director of Vietnam National Textile and Garment Group (Vinatex)
Excitement about free trade pacts
Figures from the General Statistics Office showed that Vietnam had 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, which will translate into bigger value when the Trans-Pacific Partnership Agreement negotiations wrap up, Truong said. The TPP will include 12 countries and cut US tariffs on Vietnamese garment and textiles from over 17 percent to nothing.
But Truong said 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 may also 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.