21 March 2017, Vietnam News Summary
Vietnam’s garment and textile sector is still enjoying good growth in exports to the US market even without the Trans-Pacific Partnership (TPP), according to Le Tien Truong, Director General of the Vietnam National Textile and Garment group (Vinatex).
While the sector is forecasted to benefit greatly from the TPP, it has so far thrived without TPP with Vietnam holding the second-biggest market share in the US and Japan. Those two countries are also the two main export markets of Vietnam’s garment and textile.
Enterprises in the sector have continuously made investment in machines and technology to improve their productivity, reduce cost, thus increasing their competitiveness in the two markets.
Truong said TPP only provides one more favourable condition for exports.
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), Cam said, adding that therefore, the US’s withdrawal from the TPP will not affect the sector.
He dismissed opinions that foreign investors are pouring into Vietnam’s garment-textile sector in anticipation of the TPP, saying that the agreement is only one of the reasons behind the investment. According to Cam, Vietnam also 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 realised, 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.
In 2017, Vietnam’s textile-garment sector aims for a growth rate of 7-8 percent, and 30 billion USD in export earnings. (Viet Nam Plus – March 20)