A diversified supply chain and numerous free trade agreements (FTAs) have set the stage for a strong comeback for Vietnam's footwear and textile sector, said experts and industry leaders.
Workers at a textile company in northern Vietnam. (Photo: VNA)
Hanoi (VNS/VNA) - A diversified supply chain and numerous free tradeagreements (FTAs) have set the stage for a strong comeback for Vietnam'sfootwear and textile sector, said experts and industry leaders.
Despitethe COVID-19 pandemic, the sector reported strong export figures for 2020with foreign brands and partners already saying they would either increaseproduction or place additional orders from Vietnamese textile makers in 2021,according to the Vietnam Textile and Apparel Association (VITAS).
"Inthe short-run, firms should be trying to seek new markets and diversify theirproducts. In the long-run, they must eye sustainable development and advancedautomation," said Do Quynh Chi from the Ministry of Labour, Invalidsand Social Affairs.
Thepandemic encouraged domestic firms to connect among themselves in order tosecure supply materials and establish joint production operations. It wasespecially important for smaller firms as they were able to learn from biggerplayers, to adopt better technologies and access more advanced machines.
NguyenVan Thoi, CEO of textile maker Thai Nguyen-based TNG, said international supplychain disruptions caused by the pandemic forced his firm to look for domesticsuppliers.
Inaddition, FTAs such as the EU-Vietnam Free Trade Agreement (EVFTA) and theComprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)set strict standards for textile firms on product origins, forcing firms tosource production materials domestically, said VITAS' President Vu DucGiang.
Giangsaid Vietnamese firms retained certain advantages as their products typicallyfetch higher value and required more sophisticated production techniquescompared against competitors. For instance, Vietnamese firms overtook theirrivals to become the largest exporter to the US in June this year, a placeusually held by Chinese firms.
WhileVietnamese firms only hold a modest market share in the EU, the EVFTA, whichcame into effects on August 1 this year, is said to provide a major boost toVietnamese exports. Among them are footwear and textile products, whichwere forecast to increase by 50 percent and 67 percent, respectively by 2025.
Accordingto VITAS, demand for textile products in major markets such as the US and theEU is set to return to pre-pandemic levels in the latter half of 2022. Theassociation urged firms to stay connected, to share solutions and to pool theirresources to overcome the pandemic as well as to improve management andproduction efficiency./.
With the successful control of COVID-19, Vietnam has been widely recognised by the international community as a safe and attractive investment destination.
Armed with experience from coping with the first wave of the COVID-19 epidemic, many textile and footwear enterprises are quietly confident they can alter their plans as required and find new markets to cope with the second.
Vietnam’s textiles enjoying preferential export tariff to the Eurasian Economic Union (EAEU) are likely to surpass the trigger level which results in the application of a safeguard measure cited in the Vietnam-EAEU Free Trade Agreement (VN-EAEU FTA), the Ministry of Industry and Trade (MoIT) has warned.
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Workers at a textile company in northern Vietnam. (Photo: VNA) 
