Competitive labor costs and preferential policies can help Vietnam become an ideal destination for investors in the garment and textile sector. The country can expand its market share globally, taking advantage of free trade agreements to become a manufacturer to the world’s established brands. Such agreements play an important role in helping Vietnam move up the value chain in the garment and textile industry. FDI companies have so far invested about 17.5 billion dollars in the industry. An increasing number of international buyers are sourcing products from Vietnam because supply chains for locally made products have improved and the country has joined more free trade agreements. In addition participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership will benefit the country in the long term, helping the garment and textile sector expand market share in Canada, Mexico, New Zealand and Australia and many other countries.

The EU is the second largest export market for Vietnam’s garment and textile sector, with more than 40 per cent tariffs applied to garment and textile products expected to be reduced to zero per cent when the free trade agreement takes effect. Orders are expected to shift from China to Vietnam due to the ongoing US-China trade war.