Vietnam is emerging as a potential destination for foreign investors as China is scaling down its domestic production for export due to increasing labour and land costs. Tran Bac Ha, Chairman, Bank for the Investment and Development of Vietnam (BIDV) during a workshop said that Vietnamese enterprises though, would have to restructure if they wish to compete and integrate effectively. BIDV has committed to offer $2 billion to garment firms over the next five years. This will be channelled into material area development, trade promotion and market expansion.
According to Phan Chi Dung, Director of the Light Industry Department under the Ministry of Industry and Trade, Vietnam will gain deeper access to the world’s large economies by joining bilateral and multi-lateral free trade agreements (FTAs). Besides, due to this, the country will be able to penetrate deeper in its main markets of garments, such as the European Union, the US, Japan and Korea. He underscored tariff eliminations that would result from FTAs as an expected boost for Vietnamese exports.
Do Hai Thang, Industry and Trade Deputy Minister, says that garment-textile is among those sectors that will most benefit from FTAs once in effect. However, there major challenges for the sector, along with opportunities. These include origin specifications and regulations issued by import countries. Besides, he added that that capital mobilisation is also challenging the garment and textile businesses; most of them are small- and medium-sized ones.