Exports to the US and European markets will continue to face difficulties due to a shortage of orders, according to Vietnam’s ministry of industry and trade, which recently said in a report that the 15 per cent decrease in exports is, however, still lower than the 20-25 per cent plunge in global demand this year. Many companies expect new trade pacts will help boost exports.
Domestic companies have been making efforts to pump up revenue by producing low-value products to ensure cash flow, according to Vietnamese media reports.
HCMC-based Dony Garment is focusing on small orders, including those of masks, whose price is 5-10 per cent of other products made before the pandemic. The company’s revenues in the first 11 months actually surged 2.7 times year-on-year because of masks.
Vietnam Textile and Apparel Association (VITAS) chairman Vu Duc Giang said the recently-signed Regional Comprehensive Economic Partnership (RCEP) is likely to boost China’s demand for garments made in Vietnam.
Japan is another potential market. The East Asian giant requires Vietnamese companies to prove their products are sourced from other ASEAN countries or from Japan to enjoy incentive tariffs while most of Vietnamese products are made from materials imported from China, he said.
But when the RCEP takes effect, even products with materials from China will enjoy incentive tariffs, he added.
Than Duc Viet, chief executive officer of Garment 10 Corporation Jsc, said the scrapping of tariffs on many textile and garment exports to the European Union (EU) because of the EU-Vietnam Free Trade Agreement (EVFTA) will push the sector’s growth.