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FTA - We are ready

26/08/2022 09:54 AM
Vietnam has been in the top 3 of the world's leading textile and garment exporters. In the first 6 months of 2022, textile and garment export turnover is estimated at about US$22.3 billion, up over 17.7% over the same period in 2021. This is an impressive figure for the textile industry in the context of having just gone through a difficult period due to the prolonged Covid-19 pandemic. It can be said that the textile and garment industry has become a key export industry of Vietnam, contributing about 16% of the country's export proportion. In 2020, for the first time, Vietnam surpassed Bangladesh to become the second largest textile and garment exporter in the world after China. Together, we "recognize the talents" of Vietnam's neighboring countries in developing a complete supply chain from the upstream stage of raw materials.

China

As a leading country in the export of textiles and garments in the world, has a complete textile supply chain on a very large scale. In its development strategy to 2025, China aims to not keep 39% of the world's textile and garment market share as it is today, but reduce it to 30%., This country decided to focus on the area with the highest profit margin such as recycled materials, eg recycled polyester fabrics... China has joined the Regional Comprehensive Economic Partnership Agreement (RCEP).

Bangladesh

As the world's second largest exporter of textiles and garments with a workforce of more than 4.5 million people, contributing more than 11% to GDP. In the fiscal year 2020-2021 (ending in June 2021), export turnover reached US$38.7 billion, up nearly 13% over the same period last year. Bangladesh's revenue is about 30% from import tax because the country has not signed an FTA. The Government's support policy has made an important contribution to the recovery of the textile and garment industry in the fiscal year 2021-2022 with 5 support packages totalling 372 million USD to help low-income people including garment workers affected by Covid-19. In addition, major financial institutions in the world such as the International Finance Corporation (IFC) and the World Bank have also given Bangladesh the sustainable development program "Partner for Cleaner Textiles". The United Kingdom, the European Union and the European Union continue to grant this country the GSP Universal Preferential Tariff Scheme under the Everything But Arms Program EBA after leaving the LDC group in 2024. Bangladesh has a war investment strategy for sustainable development. In 2021, 9 out of the 10 highest standards of “green apparel” factories certified by the US Green Building Council are in Bangladesh.

India

The Indian Textile and Garment industry have strengths in the entire value chain from fiber, yarn, and fabric to garments, which is very diverse. Textiles and garments contribute 5% to GDP, accounting for 12% of national export turnover; is the 6th largest exporter of textiles and garments in the world, is one of the largest cotton and jute producers globally, and is the 2nd largest silk producer in the world, creating direct jobs for 45 million people. people and 100 million people in related industries, it is expected that export turnover will reach 100 billion USD in the next 5 years, with a CAGR of 11%. India accounts for 4% of the total global textile and apparel trade.

Pakistan

As the 8th largest exporter of textile products in Asia, it is one of the few countries with a complete textile supply chain. With an export turnover of 13.3 billion USD in 2021, textiles and garments account for about 62% of the total export turnover. In trade with Vietnam, Pakistan imports filament yarn and cotton yarn with an expected high growth rate of about 200% and 1550% in the fiscal year 2021-2022 compared to 2021. Labor in the textile sector is about 2,893, 000 people. The main export market is the US 24.4%; The United Kingdom 9.7%; Germany 8.0%; China 6.3%... of the total turnover.

Vietnam

Over the past 10 years, Vietnam's share in the global textile and garment export market has increased dramatically. Vietnam has become an important link in the global textile and garment supply chain, so businesses will continue to pour capital to increase production capacity and take advantage of market opportunities from the FTAs that Vietnam has signed.

According to Mr. Vu Duc Giang - Chairman of VITAS, Vietnam's textile and garment industry needs a long-term strategy to develop raw materials in general and fabric sources in particular, when the price of input materials of the industry such as cotton, fiber... is under pressure force from geopolitical factors such as the conflict between Russia and Ukraine, unpredictable developments of the Covid-19 pandemic... To achieve that goal, there needs to be a drastic intervention of the entire political system. State management agencies build a stable macroeconomic environment; interest rates and exchange rates are suitable for export promotion. The Government has guided the economic support package, including interest rate support so that businesses can recover quickly.

In order to produce fabrics, the textile industry is required, but this is an industry that requires technology and large capital. Textile dyeing enterprises also face barriers from localities due to concerns about the risk of environmental pollution. The Ministry of Industry and Trade has developed a draft project to build a set of indicators to evaluate the performance of FTAs ​​(FTA Index), and a set of indicators to assess the level of FTA integration in provinces and cities in Vietnam (FTA Index) and propose 4 component indicators: access to information on FTAs; implementation of legal provisions; several programs to support businesses to take advantage of the opportunities of FTAs; and fulfill commitments to sustainable development. The diplomatic and trade representative offices of Vietnam in foreign countries also always update information on the host country's market to have a complete overview of Vietnamese export enterprises and assist enterprises in solving problems related to the export business. commercial defence ...

It is impossible not to mention the initiative and active integration of textile and garment enterprises in all economic sectors. According to Mr. Le Tien Truong - Chairman of Vietnam Textile and Garment Group (Vinatex), if there is an order but a lack of raw materials, it will certainly not be able to execute, so the Group and its subsidiaries invest in a methodical and continuous supply chain of raw materials. Viet Tien Garment Joint Stock Corporation, a major supplier of Uniqlo, and two strategic partners, Luenthai and Newtech, cooperated to build Fabric Factory - Viet Thai Tech, meeting strict quality requirements from the garment industry customers, with a total investment of 20 million USD meeting the green standards of the United States, this factory will be the first green standard fabric factory in Vietnam, meeting the fast-changing requirements of the world's fashion.  Thanh Cong Textile - Investment - Trade Joint Stock Company (TCM) Garment Factory No. 2 in Vinh Long province operated in March 2022 with total investment capital of about 12 million USD, a capacity of 9 million products/year. Tran Nhu Tung - Chairman of TCM said that the plant has been installed with a roof voltage system to save costs, reduce CO2 emissions, and protect the environment... TNG Investment and Trading Joint Stock Company own 2 auxiliary factories, 15 garment factories and 297 production lines, building an eco-industrial complex of textile dyeing with the goal of completing the supply chain for the textile industry - Son Cam Industrial Cluster 70ha, is expected to fully invest in 2 garment factories TNG Viet Duc and Viet Thai in the textile supply chain from packaging production, textiles, yarn, dyeing, washing...
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