How did Vietnam’s
textiles and garments conquer the US market?
Vietnam had to proceed down a thorny path and overcome many difficulties to
cement its firm position in the US textiles and garments market.
“Right after the two countries
normalized diplomatic relations, in 1995, 30 Vietnamese business leaders and
I had the chance to attend a 2-month training course in the US organized
by AAVF, the veterans’ association. We practiced at Oxford Industries, a
garment company in Atlanta,”
Le Quoc An, former chair of the Vietnam Textile and Garment Group (Vinatex),
said.
“This was the first time we learned about the way of organizing production
and business of a US
company in the garment industry. And this was the first time we approached
the US
business culture,” An said.
However, only six years later, when the Vietnam-US Bilateral Trade Agreement
(BTA) was signed was An able to use the knowledge he got at the training
course.
In late 2001, Vinatex, Vietnam’s largest textile and garment
corporation, began approaching the US market. An led a group of 20
businesses to the US
where they organized an exhibition and opened Vinatex’s representative
office.
Vietnam’s textiles and
garments to the US
began increasing significantly in 2002.
One year before, in 2001, Vietnam
could export $47 million worth of apparel products to the US, while the
figure soared by 20 times to $957 million the next year.
Two years later, export turnover reached $2.4 billion in 2004, then moved to
$3.2 billion in 2006 before climbing to $10 billion in 2014.
Vietnam, as the second
largest apparel exporter to the US, now holds 10 percent of US
market share.
However, the achievements were gained only after Vietnam overcame many
difficulties.
In April 2003, when Vietnam
and the US signed the
textile agreement, the US
set the 7 percent limit on the annual apparel export growth rate to the market.
The quota scheme was only removed in January 2007, when Vietnam
officially joined the WTO.
However, while the quota scheme was removed, the US
imposed a strict monitoring scheme over Vietnam’s exports in 2007-2008.
Only in 2009, under pressure from the US businesses themselves, the
technical barriers were removed.
Textiles & garments have become the biggest export item of Vietnam, while the US has changed from the smallest
into the biggest export market.
The textile & garment export revenue is three times higher than footwear
exports, and 5.7 times higher than seafood.
However, Vietnam
has been warned that with the Trans Pacific Partnership Agreement (TPP), the
country will encounter more ordeals which will not be any less demanding than
what was experienced over the last 15 years.
Pham Huyen, VNN
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