Hanoi (VNA) – The domestic garment industry has facedmany challenges in exporting to key markets, such as the European Union (EU)and the United States, but it still has a chance of achieving its exporttarget this year, according to experts.

First quarter figures appear to support thisexpectation. Vietnam earned 6.84 billion USD from garment and textileexports in the first quarter of this year, 11.2 percent more than in the sameperiod last year, according to the Vietnam Textile and ApparelAssociation (VITAS).

Vietnam’s textile and apparel sector has set a target of seven percent growthover 2016, with total export earnings of over 30 billion USD.

Currently, Vietnamese garment and textile products are available in 40countries and territories, with major markets including the UnitedStates, Japan, the Republic of Korea, China andthe EU. VITAS has urged enterprises to optimise the capacity of their equipmentto reduce production costs and seek orders for high-quality products.

But Dang Phuong Dung of the VITAS advisory board said the growth of exportvalue and volume to the EU was low, with local manufacturers receiving onlysmall orders. Vietnam’s garment industry has also not developed in terms ofdesign, so most textile and garment enterprises have found it difficult to completeexport orders from this market.

A high import tax rate of 8-12 percent to the EU market is also one of theobstacles facing garment exporters to this market.

The EU is the second largest export market of Vietnamese garment products, butit has only captured a 1.9 percent share of the union’s total import value,according to the association, presenting opportunities for growth.

However, Dung said, meeting the rules of origin under the EU-Vietnam Free TradeAgreement in terms of preferential tax rate would be the biggest challenge forVietnamese garment exports.

The garment industry expects ASEAN countries, including Vietnam, to sign an FTAbetween the ASEAN region and the EU, and then local garment enterprises wouldhave more options to get material for garment production from other ASEANcountries, meeting rules of origin under the FTA.

According to data of the General Department of Customs, in 2016, the textileand garment sector reached total export value of 23.8 billion USD, an increaseof 4.6 percent year-on-year. In particular, the UnitedStates continued to be the largest export market of Vietnamese garmentproducts, accounting for 48 percent of the total garment export value. The textileand garment export to the United States has increased by 12-13 percentin value each year in recent years.

Many enterprises invested in building textile and dying factories on anextensive and intensive scale to boost opportunities in production and businessfor the planned Trans-Pacific Partnership (TPP), according to the association.

But now that the TPP with the United States' withdrawal is no longer in the cards, experts saythese facilities would help the textile and garment industry completeproduction processes and actively source material, focusing on the significantopportunities offered by other FTAs, such as the EU-Vietnam and the Vietnam-Republicof Korea FTAs.-VNA