The Vietnamese garment and textile industry has grown at a healthy rate in the first quarter of the current year, and the outlook for the whole year is bright, according to the Ministry of Industry and Trade, reports Viet Nam News.
According to the Ministry, the Vietnamese garment and textile industry recorded its highest growth of 20.2 percent in the initial three months of 2014, compared to the growth rate of 4.9 percent for the entire industrial sector.
The exports of garments and textiles from Vietnam also surged up by 21.9 percent to US$ 4.5 billion in the first quarter of the current year.
The Ministry said several apparel and textile producers had bagged enough orders to last until the end of the third quarter, while some companies have orders till the end of the year. All manufacturing units are currently operating at their full production capacity to meet the spur in demand.
Meanwhile, in order to take benefit from the Trans-Pacific Partnership (TPP) and other trade agreements that are likely to be signed later this year, domestic textile and clothing producers have also increased their investments in fibre manufacturing, knitting, dyeing and apparel production.
The TPP has currently entered the final rounds of negotiations, is expected to reduce taxes on Vietnamese textiles and apparel while entering into any of the other 11 TPP member countries, including the US, Australia, Canada and Japan.
However, the TPP is likely to incorporate the ‘yarn forward’ principle, wherein Vietnamese garments made using yarn and fabric made only in any of the 12 TPP member countries would be able to enjoy lower tariffs for exporting to the other TPP members.
But, currently, most of the yarn and fabric imported by Vietnam comes from China, which is not a member of the TPP. Hence, to take full advantage of the TPP, Vietnamese firms need to make heavy investments in textile manufacturing, processing and dyeing sectors.