2024 textile and garment exports target US$44 billion

(VEN) - After learning valuable lessons in 2023, the textile and garment sector expects to make a breakthrough in 2024 with the participation of State management authorities and businesses. Vietnam Economic News’ Thu Huong spoke with Vu Duc Giang, President of the Vietnam Textile and Apparel Association (VITAS), on this issue.
Vu Duc Giang, President of the Vietnam Textile and Apparel Association
Vu Duc Giang, President of the Vietnam Textile and Apparel Association

Which lessons did the textile and garment sector learn in 2023?

The Vietnamese economy, in general, and the textile and garment sector, in particular, have learned three significant lessons. Firstly, we have successfully diversified our markets and expanded our customer base globally. Secondly, we have solidified Vietnam's position in the global textile and garment market, as evidenced by exports to 104 regions, territories, and countries worldwide. Thirdly, textile and garment businesses have adapted to strict standards and technical barriers imposed by major importing countries and the global market as a whole.

Of the total export value of US$40.45 billion in 2023, the US accounted for 47 percent, followed by Japan, the EU, the Republic of Korea, and China. These five markets play a crucial role in helping us overcome challenges and achieve desired results.

Which challenges will face the Vietnamese textile and garment sector in 2024, in your opinion?

In 2024, we believe that there are numerous intertwined challenges. First, the political relations among major powers continue to be unstable with unforeseeable issues arising. Next, there are standardization requirements imposed by importing countries on the textile and garment industry in particular, as well as on Vietnamese products in general. These standards pertain to the development of sustainable fashion lines by importers and consumers. Alongside this, there is the issue of competition in the global market for several textile and garment industries. Vietnam is one of the economies deeply integrated into global trade, necessitating the identification and resolution of these impacting factors, not only for the textile and garment sector but for all industries.

Additionally, we are facing a shortage of human resources in technology management, market analysis, raw materials, sample development, and solutions, as well as issues related to supply chain integration and the development of a strong business community. We cannot rely solely on a few strong enterprises in this “playing field.” We need a robust textile and garment collective that fosters the development of a workforce capable of meeting the demands of the fiber, textile, and apparel industries.

Currently, the Vietnamese textile and garment sector is facing a shortage of materials. However, due to a lack of awareness, many localities have imposed barriers to investment in the textile and dyeing sectors. If the textile and garment industry does not have domestic materials and relies on imports, it will undermine trade agreements with zero tariff rates.

Furthermore, there are challenges related to environmental management solutions, fire prevention and firefighting management, and measurement standards. We need to recognize that this is a global “playing field.” Therefore, we must adapt to global standards to implement them appropriately without causing difficulties for businesses.

Vietnamese textile and garment companies are capable to meet strict requirements of the global market
Vietnamese textile and garment companies are capable to meet strict requirements of the global market

What should the textile and garment sector do to achieve the US$44 billion export value target set for 2024?

It is forecast that the global economy will continue to experience fluctuations. An increasing number of major textile and garment import markets are introducing new mandatory regulations related to human rights and environmental assessments within the supply chain, eco-design requirements, recycled products, and textile waste management.

However, the Vietnamese textile and garment sector still has advantages over competing countries. Vietnam is the only country that has signed free trade agreements (FTAs) with all major economies such as the US, Japan, China, the EU, the UK, and Russia. The recently approved development strategy for the textile, garment, leather and footwear industries in Vietnam until 2030, with a vision towards 2035, will lay the foundation for foreign investment attraction in the fiber-textile-dyeing sector, creating opportunities for the textile and garment industry to benefit from these agreements.

The textile and garment sector has set an export value target of US$44 billion for 2024, an increase of approximately US$4 billion compared to 2023. To accomplish this goal, several major issues need to be addressed. First, there is a need to continue diversifying markets, customers, and product lines. The sector aims for sustainable development that aligns with the global market's requirements for green development, greenhouse gas emissions reduction, and environmental-friendly practices. Additionally, investment in technology, automation, and adaptable supply chains for fast delivery of small orders and high-quality products is crucial. There should be a focus on fashion industry, specifically planning industrial zones that meet environmental standards to attract investments in selected regions and localities.

I think the Government and the Ministry of Industry and Trade should work with local authorities to plan the development of industrial zones that comply with environmental protection laws and allow for attracting investments in the textile and dyeing industry. Additionally, there should be efforts to turn Hanoi and Ho Chi Minh City into fashion industry hubs and promote Vietnamese brands in both domestic and international markets. It is important to introduce several brands to the world. The textile and garment sector needs to adapt quickly to the requirements of FTAs and build a strong supply chain to create a cohesive strategy for development.

The current tax mechanisms are barriers for various industries, especially the textile and garment sector. It is necessary to review the policies on import-export taxes as well as value-added taxes on inputs to ensure the stable operation and investment solutions of the textile and garment sector. There should be financial policies that encourage and support businesses’ investment in energy transition to create products that meet the emission regulations and standards of the import markets.

Finally, developing Vietnamese brands in the global market is crucial. Businesses need mechanisms, policies, and strategic planning to determine the number of brands they want to establish. Based on that, they can choose investment solutions to introduce those brands to the global market, including e-commerce platforms and global sales channels. This requires planning and coordination from the Government and relevant State agencies to register exclusive trademarks in the global market. It is an urgent task that should not be delayed

Thu Huong

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