Vietnam’s apparel product export to EU face obstacles

Vietnam’s apparel product exporters to the European Union (EU) market are facing many difficult and it is not easy to overcome soon.

Although export turnover of textiles and garments to the EU market has recently started to increase again over early this year, but comparing to other traditional markets such as the US, Japan and Korea, the growth remains slow.

During the first nine months this year, Vietnam’s apparel product exports to the US market reached $4 billion, up 22.1 percent year-on-year, to Japan market fetched $700 million, rising 15 percent y-o-y while to the EU market earned only $1.18 billion or a year-on-year rise of 6 percent, according to statistic from Ministry of Industry and Trade.

According to an analysis of the Vietnam Textile and Apparel Association (Vitas), the countries of Eastern Europe and North Africa, which is a large supply of textiles to the EU market 10 years ago, now yield market share and opportunities for Asian countries, including Vietnam.

Particularly, Morocco decreased from 5.92 percent market share of EU garment and textile market in 2000 to 3.45 percent in 2009, Poland from 4.1 percent to just 0.98 percent. Turkey, a major exporter to the EU also maintained at 14 percent market share in recent years.
Several years ago, Vietnam’s garment was and textile firms have taken full advantage of bringing Vietnamese goods to the EU market, with an average export growth of 12-13 percent per year. However, the growth has decreased during recent months because of several main reasons.

First, all Vietnam’s exporters to the EU market are facing difficulties, not just garment and textile sector, according to the European Market Department (Ministry of Trade and Industry). Tran Ngoc Quan, head of the EU (European Market Department) said that difficulties for exporters to the EU market, first are the difference in tastes and style of consumption, language, business culture of each country and each area, while the goods exported to the EU market is being sold across 27 countries. Thus, the creation of a product and bring this product to a country and must adapt to the 26 remaining countries is a big challenge for Vietnamese enterprises.

Second, the EU market has many strict technical regulations quite with the aim of protecting human health, environmental protection such as regulation on using chemicals (Reach) that has taken effect since 2009.

Third, Vietnamese firms lack capital for investing in modern test equipments as well as lack of update information.

Additionally, it must be mentioned that the EU is still looking for ways to maintain protectionism policies for domestic production. The too fast export growth for any items to the EU market can also lead to undesirable consequences that EU will take safeguard measures and anti-dumping.

 

Category: Business