Three scenarios for textiles & garments after Trump takes office

Vietnam’s textile & garment sector will maintain current growth if the US withdraws from the TPP, analysts say, but the growth would be higher if the TPP is approved by the US.

Donald Trump, who takes office as the 45th US President on January 20, 2017, is against the TPP because of concern about jobs for US citizens, as thevdomestic industry will have to compete with imports from TPP countries.

The US is now the biggest export market for Vietnam which consumes 50 percent of Vietnam’s total textile & garment export turnover.

In October 2016 alone, Vietnam exported $9.476 billion worth of textile & garment products to the US.

If TPP takes effect, analysts estimate that Vietnam’s textile & garment export turnover would increase by 30-40 percent in the first year of the agreement implementation, and would increase by twofold after three to four years.

This means that export turnover would reach $16 billion by 2018, an increase of $3 billion, and to $20 billion by 2020.

However, the figures may be unattainable as Trump announced the US would withdraw from TPP soon after he takes office in January.

Truong Van Cam, Vitas’ secretary general, said on Hai Quan that Vietnam will still see its textile & garment exports to the US increasing, with or without TPP.

In recent years, the export turnover to the market has been growing steadily by 12-13 percent per annum, while the US import turnover has been growing by 3 percent only. Vietnam’s products just account for 9 percent of the US total textile & garment imports.

Nguyen Duc Thanh, head of VEPR, also thinks that the US withdrawal from TPP won’t affect Vietnam’s exports to the market. However, textile & garment exports would not increase as sharply as initially planned.

According to Le Quoc An, a textile & garment expert, and former chair of Vitas, there are three possible scenarios for Vietnam.

First, TPP could take effect, but the content of the agreement would change. If so, Vietnam’s export turnover to the US would be 50 percent lower than initially designed.

Second, TPP fails. If so, Vietnam’s exports to the US will still enjoy MFN like other WTO members. In this case, exports would depend on US economic performance

Third, there is no TPP, and the Trump administration imposes a monitoring scheme and anti-dumping duties on imports from Asia, including Vietnam. If so, Vietnam’s exports would decrease.

In 2002, when the Vietnam-US Bilateral Trade Agreement (BTA) took effect, Vietnam’s textile & garment export turnover soared to $957 million from $50 million in the years before.

Kim Chi / vietnamnet