Textile export into the EU is growing strongly

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There are many chances for textiles in the EU market. Photo: Nguyen Hue

According to Guilame Crouzet, representative of France Chamber of Industry in Viet Nam, the potential for Vietnam’s textile export into the EU is huge in the period 2007 – 2015. Like Cambodia and Bangladesh, Vietnam is one of three countries with strong growth in exporting textile products into the EU, increasing by 25% equivalent to $US 3 billion/ year. Of these, the items were exported the most into the EU, including suits for men (increasing by 48%); clothes for men (growing by 32%); dresses (rising by 28%),

The Vietnam – EU FTA having been signed would be the chance for Vietnam textile enterprises to push export into the EU. On effectiveness of the agreement (in 2018 as planned), 71% of Vietnam’s exports into the EU would be free of duty; the remaining headings would be further deleted during the 7 succeeding years. It is planned that in 2025 when the Vietnam – EU FTA comes fully into force, 99% of Viet Nam’s goods exported into the EU would be exempted from duties / taxes. At present, Vietnam’s exports into the EU are subjected to the tax rate from 8% - 12%. Nevertheless, for benefits from preferential taxes, exports must have origins of Vietnam, EU and Korea.

According to Ms. Nguyen Thi Tuyet Mai, Deputy General Secretary of Viet Nam Textile Association, the textile sector has about 6,000 enterprises, providing jobs for 2.5 million people. During the past 10 years, the textile sector has maintained a growth rate of nearly 17.5%/ year. Currently, the textile sector is standing at the second position of export turn-over nationwide and at the top 5 of textile exporting countries in the world. Despite the fact that textile enterprises have faced various difficulties in 2016, the export volume is expected to reach approximately $US 29 billion.

Ms. Mai shared that Vietnam joined a series of FTAs with the huge markets in the world, which brought many chances for the textile sector. Together with the trend of moving by labor, Vietnam is considered to be a destination for investors in the world. However, labour costs are getting higher and higher due to rising minimum salary, resulting in an increase in health insurance cost, social insurance cost, prices and difficulties for domestic enterprises. This is also the reason for the tendency of moving orders from Vietnam to Cambodia and Myanmar.

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According to the Vietnam Textile Association, the cooperation with the EU in particular and other countries in the world in general would help the textile industry enhance the capacity of designing, managing production, increasing labour efficiency and then changing the production models from processing to FOB (self preparation of material), and OBM (self production and distribution). This contributes to raise textile enterprises’ activeness and added value.