Vietnam's textile and garment industry have made great progress and managed to take advantage of free trade agreements (FTAs) such as Vietnam - Korea FTA, Vietnam-Eurasian Economic Union FTA (Vietnam - EAEU FTA), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and European-Vietnam FTA (EVFTA), according to a report released by the Ministry of Industry and Trade.

Vietnam's textile and garment export turnover reached US$28.1 billion in 2016 and soared to US$38.9 billion in 2019, an average growth of 9.55%.

In particular, the trade surplus increased rapidly, from US$11.1 billion in 2016 to US$16.9 billion in 2019. Vietnam's textile and garment export value ranked fourth in the world in 2016 after China, Bangladesh and India and ranked third in 2019 after surpassing India.

In 2020, due negative impacts of the Covid-19 pandemic from both supply and demand sides, the textile and garment industry was one of the most affected industries along with the tourism, aviation, and footwear industries. Given weakening consumer demand in the United States and Europe amid restriction measures to curb the pandemic, Vietnam’s textile and garment export was hard hit. The U.S. and European markets accounted for about 45% and 18% of Vietnam’s textile and garment export value, respectively.

The export value of the textile and garment industry declined 9.29% year on year to an estimated US$35.27 billion in 2020. This was indeed a good performance level given that the total world textile and apparel demand shrank by 25%.

In 2020, the leather and footwear industry also faced numerous difficulties because of Covid-19 pandemic impacts, especially when the pandemic developed complicatedly in major importers of Vietnamese footwear like the U.S. and the EU (accounting or 36% and 27% of Vietnam's footwear export value, respectively).

Vietnam's footwear and handbag exports valued US$22 billion in 2019 (up 12% over 2018) but declined to US$20 billion in 2020 due to the Covid-19 pandemic.

To restore and develop the textile and garment industry, in the coming time, the Ministry of Industry and Trade will carry out trade promotion and export support programs and diversify export markets, avoid risks and ensure rules of origin imposed by FTAs. It will support enterprises to find, connect and expand markets, give priority to tapping domestic consumption demand and avoid dependence on a single market.

The ministry will build and implement the garment and footwear industry development strategy to 2030, with a vision to 2035; work out the program on sustainable development of the garment and footwear industries in 2021-2030 in order to remove input supply bottlenecks, support human resource training, and apply Technology 4.0 to product design, and make the most effective use of new-generation FTAs such as EVFTA and CPTPP.

For the leather and footwear sector, the ministry will focus on solving internal difficulties, maintaining the export market in line with developing the domestic market and expanding sales channels to tap the domestic market. It will strengthen trade promotion programs for Vietnamese footwear products in the U.S. and EU markets and keep track of market developments to capture information in order to adjust production and business directions in a timely manner.

Source: VCCI

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