Vietnam Textile And Garment Association Predicts: Textile And Garment Export May Reach 39 Billion US Dollars In 2021

Vietnam's "investment online" reported on December 29 that Vietnam's textile and clothing export will show a 10.5% negative growth for the first time in 25 years in 2020, with the export volume of only $35 billion, a decrease of $4 billion compared with the $39 billion in 2019, according to Nguyen chin Chang, vice chairman of Vietnam's textile and clothing association

However, under the background that the total trade volume of the textile and clothing industry in the world has dropped from 740 billion US dollars to 600 billion US dollars, the overall decline rate is 22%. The decline rate of all competitors is generally 15-20%. Even some of the decline rate is as high as 30% due to the isolation policy, and the decline rate of Vietnam's textile and clothing export is not large.

In 2020, Vietnam ranks among the top 5 textile and garment exporting countries in the world due to no isolation and production suspension. This is also the most important reason for Vietnam's textile and garment exports to maintain the top 5 in the situation of clothing export decline.

According to the mckenzy report published on December 4, 2020, the profits of the global textile and garment industry will shrink by 93% in 2020. More than 10 well-known clothing brands and supply chains in the United States will go bankrupt, and about 200000 people will be unemployed in the clothing supply chain of the country.

At the same time, because production was not interrupted, Vietnam's textile and clothing market share continued to grow, reaching the level of 20% of the U.S. market share for the first time, and occupied the first position in many months.

With the entry into force of 13 free trade agreements including evfta, although not enough to make up for the decline gap, they also played an important role in the case of reduced orders.

It is predicted that the textile and garment market will recover to the level of 2019 as soon as the second quarter of 2022 and at the latest in the fourth quarter of 2023. Therefore, in 2021, it is still a difficult and uncertain year to be trapped in the epidemic situation. Many new features of the supply chain have emerged, forcing textile and garment enterprises to adapt passively.

First of all, the trend of price reduction has filled the market, and simple style goods have replaced fashion, which has led to overcapacity on the one hand, and lack of new capacity on the other hand, online sales are becoming more and more prosperous, and intermediate links are reduced.

In view of these market characteristics, Vietnam's textile and clothing industry's highest target in 2021 is to export 39 billion US dollars, which is 9 months to 2 years faster than the general market. Compared with the high target, the general target is to export US $38 billion, because the textile and clothing industry still needs the support of the government in stabilizing the macro-economy, monetary policy and interest rates.

According to the Vietnamese news agency on December 30, Vietnamese time at 21:00 on December 29, authorized representatives (ambassadors) of the Vietnamese and British governments officially signed the "Vietnam UK free trade agreement" (ukvfta) in London, UK.

Prior to that, on December 11, 2020, Vietnam's minister of industry and trade, Chen Junying, and British Minister of international trade, Elizabeth truss, signed a memorandum to end the ukvfta agreement negotiations, laying the foundation for the necessary legal procedures for the two countries to formally sign.

At present, the two sides are speeding up the completion of relevant domestic procedures, in line with the legal provisions of their respective countries, so as to ensure the immediate implementation of the agreement from 23:00 on December 31, 2020.

The signing of the ukvfta agreement will ensure that bilateral trade between Vietnam and the UK will not be interrupted after the end of the transition period (December 31, 2020) in the context of the formal brexit of the UK and the UK.

The ukvfta agreement not only opens up trade in goods and services, but also incorporates many other important factors, such as green growth and sustainable development.

Britain is Vietnam's third largest trading partner in Europe. According to the statistics of Vietnam General Administration of customs, in 2019, the total import and export volume of the two countries will reach 6.6 billion US dollars, of which the export value will reach 5.8 billion US dollars and the import value will reach 857 million US dollars. In 2011-2019, the average annual growth rate of bilateral import and export of Vietnam and the UK is 12.1%, higher than the average annual level of Vietnam of 10%.

Vietnam's main exports to the UK include mobile phones and accessories, textiles and clothing, footwear, aquatic products, wood and wood products, computers and parts, cashew nuts, coffee, pepper, etc. Vietnam imports machinery, equipment, pharmaceuticals, steel and chemicals from the UK. The import and export commodities between the two countries are complementary rather than competitive.

The total import of goods from the UK amounts to nearly 700 billion US dollars each year, and Vietnam's total exports to the UK account for only 1%. Therefore, there is still a lot of room for the growth of Vietnamese products to the UK market.

After brexit, the benefits from the evfta will not apply to the UK market. Therefore, the signing of a bilateral free trade agreement will create favorable conditions for promoting reform, market opening and trade facilitation activities on the basis of the positive negotiation results of evfta.

According to the Ministry of industry and trade of Vietnam, some commodities with export growth potential in the UK market include textiles and garments. In 2019, the UK mainly imports textiles and garments from Vietnam. Although China has the largest market share in the UK market, its textile and clothing exports to the UK have fallen by 8% in the past five years. In addition to China, the countries exporting textiles and clothing to the UK are Bangladesh, Cambodia and Pakistan. These countries have an advantage over Vietnam in terms of tax rates. Therefore, the free trade agreement between Vietnam and the United Kingdom will bring about tariff preferences, which will help Vietnam's goods have more competitive advantages with other competitors.