Vietnams textile and garment sector is steadily growing and remains one of the countys top export industries, significantly contributing to the countrys Gross Domestic Product (GDP) growth. Export revenue in calendar year (CY) 2017 was reported at $ 31.5 billion, up about 10 percent over the previous year. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), signed on March 8, 2018, will offer an opportunity for Vietnams textile and garment industry to grow in the coming years. Prior to this trade deal, Vietnam was already the second largest exporter of textile and garment products to CPTPP countries, behind China.
When CPTPP enters into force, Vietnams garment and textile industry expects to benefit through increased export revenue, especially to Canada, Mexico, and Peru, the three CPTPP members with which Vietnam does not yet have a free trade agreement (FTA). Industry forecasts of Vietnams textile and garment exports to CPTPP countries is about $ 5 billion in CY 2018, up 20 percent over 2017. The increase in sales to CPTPP members could help the industry maintain its 10 percent export growth in 2018.
Vietnams spinning sector is comprised of about 100 spinning mills with about 8.5 million spindles (equivalent), which had an estimated capacity of over 2 MMT of yarn in 2017. Investment inflow from both foreign and domestic sources into the textile and garment industry in general, and the spinning sector specifically, is likely to continue in the coming years. Foreign Direct investment (FDI) into Vietnam is expected to increase and capture opportunities fueled by ongoing FTAs and the recently approved CPTPP.Vietnams total yarn exports in CY 2017 reached 1.35 MMT, up about 15.6 percent over the last year, of which approximately 1 MMT were reported cotton yarns (HS 5205 and 5206). China, South Korea, and Turkey are the largest importers, comprising over 80 percent of Vietnams total cotton yarn exports. Vietnam will continue to maximize the advantages offered by geographic proximity, competitive cost, and the benefits conferred by FTAs to boost yarn exports to these three markets.