Vietnamese textiles and clothing firms are seeking to expand to the EU market in order to compensate for the lack of export orders. In the first eight months of 2020, Vietnam’s textiles export revenues decreased by 11.6 per cent. The Vietnam Textile and Apparel Association (VITAS) says the decline is expected to continue by 15 percent until the end of the year. At present, the textile industry holds up to 118.7% of inventory products, with 20% of firms obliged to shut down and another decreased manufacturing activities for labor and restructure.
As several multinational fashion companies, such as New York & Company, J C Penney and Brook Brothers have declared bankruptcy, the key products, including masks, working wear, medical equipment and rapid fashion, have turned into domestic textile factories for cheap or medium range. Although domestic consumption is anticipated to rise 5% by the end of 2020, Le Tein Truong, general director of the Vietnam National Textile and Garment Group (Vinatex) said that this will not compensate for the export orders shortage. The deal enables businesses to hit an export turnover of $7 billion, which is the 2019 Vietnam-Europe Free Trade Agreement (EVFTA). Truong said that the opportunity for Vietnam to benefit entirely from EVFTA, increase market share in the EU, and compete with the Bangladeshi suppliers with competitive prices and quick delivery times. The business should boost logistical capability so that delivery time is shortened and the Government should simplify administrative processes, minimize clearance and time of inspection, he added.
Manufacturers should also begin to use the accumulated rules of origin to import products out of countries that have signed FTA with Vietnam and the EU. They should also work in the field of sports, medical and advanced textiles and workwear, hi-tech, and developing manufacturing technology, enhancing the capability of management and engaging in social and environmental factors.