Vietnam's Fashion Industry Adapts to Sustainability for Global Success
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- Published: Tuesday, 31 October 2023 03:04
As the world becomes increasingly conscious of environmental and health concerns post-COVID-19, Vietnam's fashion sector is embracing eco-friendly and sustainable practices to thrive in the global market and make the most of free trade agreements (FTAs), including those with the UK.
Việt Nam's export to the United States, reaching an estimated value of $8.11 billion in September, highlights the country's rising prominence on the global fashion scene. These figures contributed to an impressive $70.23 billion in exports to the United States during the first nine months of the year, solidifying the U.S. as Vietnam's primary importer of commodities during this period.
According to Vũ Đức Giang, Chairman of the Việt Nam Textile and Apparel Association (VITAS), participation in new-generation FTAs has opened significant opportunities for the garment and textile industry, including commitments to trade liberalization. However, these agreements also demand that Vietnamese products meet stringent standards for green and sustainable production, recycling, emissions, working conditions, and garment durability and safety.
The impact of these FTAs is evident in the recent drop in the export of garment and textile products, which decreased by 12 percent in the first nine months of the year due to falling global demand and commitments to rules of origin, environmental protection, and low emissions.
Vietnamese businesses are now recognizing the importance of sustainability in fashion. According to Vũ Kim Hạnh, President of the Business Association of High-Quality Vietnamese Products, sustainable fashion integrates the "green factor" into every stage, from production to distribution, forming sustainable value chains. While fast fashion remains dominant in Vietnam, green and sustainable fashion is gaining momentum in European markets, offering benefits like environmental protection, resource conservation, and waste reduction.
In light of these global trends, Trần Ngọc Liêm, Director of the Việt Nam Chamber of Commerce and Industry’s HCM City chapter, emphasizes that digitalization and sustainability are essential trends for Vietnam's garment and textile industry, especially with an eye on the year 2050.
Ensuring that the sector aligns with these global trends is crucial. If Vietnam fails to do so, the world's third-largest garment exporter could gradually lose its competitive advantage.
This shift toward sustainability is also crucial to leverage opportunities arising from the UK–Việt Nam Free Trade Agreement (UKVFTA), which aims to create a more circular fashion industry. In 2022, Vietnam's exports of garment and textile products to the UK reached $765 million, comprising 12 percent of the UK's total imports from Vietnam.
In the long term, UKVFTA rules of origin and other agreements could encourage closed production chains and increase added value, offering long-term benefits to Vietnam's textile and garment industry, diversifying markets, and reducing risks from global fluctuations.
To meet these requirements, Vietnamese businesses must enhance production capacity, secure raw material supplies, and meet safety, environmental, and consumer health standards. This push toward sustainability and compliance will ensure Vietnam's continued success in the global fashion landscape, with garment exports predicted to reach around $40 billion in the near future. In 2022, Vietnam's garment export value reached $44.5 billion, securing its place as the third-largest exporter of garment products, following China and Bangladesh.