A few days ago, Nguyen Jinchang, vice chairman of the Vietnam Textile and Apparel Association, said that 2020 is the first year that Vietnam’s textile and apparel exports have experienced a negative growth of 10.5% in 25 years. The export volume is only 35 billion U.S. dollars, a decrease of 4 billion U.S. dollars from the 39 billion U.S. dollars in 2019. However, in the context of the global textile and apparel industry’s total trade volume falling from US$740 billion to US$600 billion, an overall decline of 22%, the decline of each competitor is generally 15%-20%, and some have even dropped as much as 30% due to the isolation policy. , Vietnam’s textile and apparel exports have not fallen much.

Due to the absence of isolation and production suspension in 2020, Vietnam ranks among the top 5 textile and apparel exporters in the world. This is also the most important reason for helping Vietnam’s textile and apparel exports to remain in the top 5 exports despite the sharp decline in apparel exports.

In the McKenzy (mc kenzy) report published on December 4, it was pointed out that the profit of the global textile and apparel industry will shrink by 93% in 2020. More than 10 well-known apparel brands and supply chains in the United States have gone bankrupt, and the country’s apparel supply chain has about 20%. Ten thousand people are unemployed. At the same time, because production has not been interrupted, the market share of Vietnam’s textile and apparel continues to grow, reaching the level of 20% of the US market share for the first time, and it has occupied the first position for many months.

With the entry into force of 13 free trade agreements, including EVFTA, although they were not enough to make up for the decline, they also played an important role in the reduction of orders.

According to forecasts, the textile and apparel market may return to 2019 levels as early as the second quarter of 2022 and the fourth quarter of 2023 at the latest. Therefore, in 2021, being trapped in the epidemic will still be a difficult and uncertain year. Many new characteristics of the supply chain have emerged, forcing textile and apparel companies to adapt passively.

The first is that the wave of price cuts has filled the market, and products with simple styles have replaced fashion. This has also led to overcapacity on the one hand, and insufficient new capabilities on the one hand, increasing online sales and reducing intermediate links.

In view of these market characteristics, the highest goal of Vietnam’s textile and apparel industry in 2021 is 39 billion US dollars, which is 9 months to 2 years faster than the general market. Compared with the high target, the general target is 38 billion U.S. dollars in exports, because the textile and apparel industry still needs government support in terms of stabilizing the macro economy, monetary policy, and interest rates.

On December 30, according to the Vietnam News Agency, the authorized representatives (ambassadors) of the Vietnamese and British governments formally signed the Vietnam-UK Free Trade Agreement (UKVFTA) in London, UK.　　 Previously, on December 11, 2020, Vietnam’s Minister of Industry and Trade Chen Junying and the British Secretary of International Trade Liz Truss signed a memorandum of understanding to conclude the negotiation of the UKVFTA agreement, laying the foundation for the necessary legal procedures for the formal signing of the two countries.

At present, the two parties are rushing to complete the relevant domestic procedures in compliance with the laws and regulations of their respective countries, ensuring that the agreement will be implemented immediately from 23:00 on December 31, 2020.

In the context of the UK’s formal withdrawal from the EU and the end of the transition period after the EU exit (December 31, 2020), the signing of the UKVFTA agreement will ensure that the bilateral trade between Vietnam and the UK will not be interrupted after the end of the transition period.

The UKVFTA agreement not only opens up trade in goods and services, but also incorporates many other important factors, such as green growth and sustainable development.

The UK is Vietnam’s third largest trading partner in Europe. According to statistics from the General Administration of Customs of Vietnam, in 2019, the total value of imports and exports between the two countries reached 6.6 billion U.S. dollars, of which exports reached 5.8 billion U.S. dollars and imports reached 857 million U.S. dollars. During the period from 2011 to 2019, the average annual growth rate of the total bilateral import and export volume of Vietnam and Britain was 12.1%, which was higher than Vietnam’s average annual rate of 10%.

The main products that Vietnam exports to the UK include mobile phones and their spare parts, textiles and clothing, footwear, aquatic products, wood and wood products, computers and parts, cashew nuts, coffee, pepper, etc. Vietnam’s imports from the UK include machinery, equipment, medicines, steel, and chemicals. The imports and exports between the two countries are complementary rather than competitive.

Britain’s annual merchandise imports total nearly US$700 billion, and Vietnam’s total exports to the UK account for only 1%. Therefore, there is still a lot of room for Vietnamese products to grow in the UK market.

After Brexit, the benefits brought by the “Vietnam-EU Free Trade Agreement” (EVFTA) will not apply to the UK market. Therefore, signing a bilateral free trade agreement will create convenient conditions for promoting reforms, opening markets and trade facilitation activities on the basis of inheriting the positive results of EVFTA negotiations.

The Ministry of Industry and Trade of Vietnam stated that some commodities with export growth potential in the UK market include textiles and clothing. In 2019, the UK mainly imports textiles and clothing from Vietnam. Although China has the largest market share in the UK market, the country’s textile and apparel exports to the UK have fallen by 8% in the past five years. In addition to China, Bangladesh, Cambodia and Pakistan also export textiles and clothing to the UK. These countries have an advantage over Vietnam in terms of tax rates. Therefore, the free trade agreement between Vietnam and the United Kingdom will bring preferential tariffs, which will help Vietnamese goods have a competitive advantage with other competitors.