Local textile and apparel firms in Vietnam must reach a total of USD 7 billion in export orders in order to achieve the export turnover target of last year. And EU Vietnam FTA is seen as the best opportunity by which local firms can fulfill their goals. Vietnam’s local textile and apparel businesses need to consider key factors such as prices, fast delivery, and tax incentives presented by the EVFTA in order to compete with strong rivals from Bangladesh and Turkey.

As for rapid delivery requirements, beside improving logistic capacity, there should be improvements in simplifying administrative procedures and reducing the clearance time faced by export businesses.  

 

Moreover, the domestic textile and garment sector must be proactive to use import materials from countries that have signed FTAs with the nation and the EU, making use of preferential tariffs due to flexible rules of origin stated within the EVFTA.

 

The industry has therefore been advised to shift to supplying high-tech garment and textile products, including protective clothing, sports, and medical equipment. The complicated nature of COVID-19 has put impacted the sector’s export markets, with global purchasing power in general plummeting, while a series of well-known fashion brands such as Brook Brother, New York & Co, and JCPenny declaring bankruptcy.

 

As per the Vietnam Textile and Apparel Association, the country exported garments and textiles worth USD 19.2 billion in first eight months of the year, a year-on-year decline of 11.6 percent.  

 

The number of export orders in the capital HCM city too witnessed a sharp fall of 25 percent in April, and over 30 percent in May, with figures predicted to continue falling during the second half of the year, says HCM City Association of Garment Textile Embroidery and Knitting.

 

At present, the entire sector has an inventory rate of 118.7 percent, with roughly 20 percent of textile enterprises being forced to suspend their operations, while the remaining businesses dismissing a large number of workers and restructuring their production activities.

Source: fashionatingworld.com