Fashion | News & Insights

Fashion Industry Seeks to Leverage Trade Deals by Embracing Sustainability

Published: October 24, 2023

Transitioning to eco-friendly and sustainable practices has become essential for the fashion industry in Việt Nam if it wishes to tap into opportunities presented by free trade agreements (FTAs), such as the trade agreement with the UK. The COVID-19 pandemic has made consumers more conscious of environmental and health concerns, leading many brands to incorporate green and sustainable materials into their products.

Participating in new-generation FTAs provides significant opportunities for Việt Nam’s garment and textile industry, but it also requires the sector to meet more stringent standards in terms of production, recycling, emissions, working conditions, and garment durability and safety. The export of garment and textile products in Việt Nam was affected by falling global demand, economic uncertainties, and commitments related to environmental protection.

Going green is particularly crucial for Việt Nam to benefit from the UK–Việt Nam Free Trade Agreement (UKVFTA) and expand exports to the UK, which aims to develop a circular fashion industry. While Việt Nam has shown competitiveness through the UKVFTA, challenges related to the rule of origin and imported fabrics remain. However, in the long term, the UKVFTA’s rules of origin would encourage the formation of a closed production chain, increasing added value.

To seize opportunities and increase exports, Vietnamese enterprises must focus on enhancing production capacity, seeking trans-regional raw material supplies, improving product quality, establishing closed and sustainable value chains, innovating technology, diversifying products, building brands, and strengthening environmental and social governance. The garment industry in Việt Nam acknowledges that sustainable development is a critical trend and aims to invest in green production to achieve further growth in the coming years.

Overall, going green is critical for Việt Nam’s fashion industry to capitalize on trade deals and expand its presence in the global market. By embracing eco-friendly and sustainable practices, the sector can meet international standards, increase exports, and secure a competitive advantage in the evolving fashion landscape.

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