Optimistic outlook for textile and garment exports in 2018
NDO - Vietnam's target of exporting US$34-34.5 billion worth of garments and textiles for 2018 is within reach as the Vietnam Textile and Apparel Association (VITAS) said that many companies have received orders until the end of the third quarter of 2018.
According to VITAS statistics, the total export revenue of textile and garment products was estimated at US$7.62 billion in the first quarter of 2018, an increase of 13.35% over the same period last year, and equivalent to 22.4% of the year's target.
First quarter exports soared sharply
Vice President and General Secretary of VITAS Truong Van Cam said that in the first quarter, the export revenue of garment products alone posted at US$5.98 billion, up 12.49% compared to the first quarter of 2017. Besides traditional garment and textile products, goods with a high value-added such as fabrics, fiber, geotextiles, and textile and garment accessories have also grown very well.
In terms of export markets, Vietnam enjoyed stronger growth in export revenue with its key export markets including the US, member countries of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the EU, the Republic of Korea, China, and ASEAN. T-shirts, jackets, and shirts were among the top export products in the first two months of this year.
According to the General Department of Customs, Vietnam’s textile and garment exports to the US were reported to be around US$3.14 billion in the first quarter of this year, up 13.2% over the corresponding period in 2017, the highest pace of growth in the last three years.
Vitas predicted that Vietnam’s garment and textile export revenue to the US would reach nearly US$13.8 billion in 2018, up 11% compared to 2017.
Truong Van Cam said that many garment and textile enterprises have received orders until the end of the third quarter, which, in combination with favourable prospects for the world and domestic economy in 2018, makes the export target of US$34-34.5 billion for 2018 an achievable goal.
CPTPP to be Vietnam's second largest textile and garment export market
Vietnam's textile and garment exports to CPTPP member countries grew at an average rate of 8% per year in the 2013-2017 period, accounting for about 15% of Vietnam's total textile and garment export revenue.
Within CPTPP, Canada, Mexico, Australia, New Zealand, and Singapore often import Chinese textiles and garments. When CPTPP becomes effective, it will create advantages for Vietnamese textile and garment products to enter these markets thanks to preferential treatment under tariff reductions. For instance, Canada commits to immediately eliminate 42 tariff lines for Vietnamese textile and apparel products upon the effectiveness of the trade deal.
It is expected that Vietnam's textile and garment exports to CPTPP countries will reach US$4.8 billion in 2018, an increase of about 10.5% compared to 2017. Thus, the bloc of CPTPP countries will be the second largest export market for Vietnam after the US market, which accounts for 47% of Vietnam's total garment and textile export turnover.
However, in order to enjoy tariff incentives when the CPTPP comes into effect, Vietnam's textiles and garments must meet the “yarn forward rule of origin,” which means that all items in a garment from the yarn stage to the weaving, dyeing, and sewing stages must be made in member countries of the CPTPP deal.
Regarding the level of development of textiles and garments, the technical standards of the CPTPP are not a big problem for Vietnamese enterprises. The matter is to meet the ratio of textile and garment accessories produced within CPTPP countries for the total value of the finished product.