In May, the industry earned $1.75 billion, up only 3.8 per cent.

 

The United States was the largest export market of the industry, with $3.4 billion, up 6 per cent. The European Union, Japan and South Korea followed with $936 million, $845.17 million and $677.2 million, respectively.

 

Industry insiders are concerned with meeting the industry’s export target of $31 billion this year due to falling export prices and difficulties in finding new export contracts, especially for shirts, pants and jackets.

 

Thân Đức Việt, deputy general director of the Garment No.10 Corporation, said this year’s business results for local textile and garment exporters, especially among small- and medium-sized firms, were not as good as expected due to rising input costs and falling demand.        

 

The chairman of the Việt Nam Textile and Apparel Association (VITAS), Vũ Đức Giang, said some traditional customers of Việt Nam’s garment exporters were moving their orders to Laos and Myanmar, which have preferential tax rates for exports to the United States and European Union.

 

Currently, the tax imposed on Việt Nam’s textile and garment exports to the United States averages 17 per cent, while the rate to the European Union is nearly 10 per cent. The taxes are expected to drop to zero by mid-2018 when the Trans-Pacific Partnership and Việt Nam-EU Free Trade Agreement take effect.

 

Giang said domestic textile and garment exporters will therefore have to compete fiercely against producers from Laos, Myanmar, Cambodia and Bangladesh.

 

VITAS said export growth rates among these producers were rising faster than in Việt Nam. It offered Cambodia as an example. Việt Nam’s textile and garment exports to the European Union were valued at EUR2.53 billion in 2014 and EUR3.13 billion in 2015. Meanwhile, the European Union imported textiles and garments worth EUR2.26 billion in 2014 and EUR2.97 billion in 2015 from Cambodia.