Vietnamese apparel exports to US double in four years

August 6, 2009

Vietnamese clothing exports to the US more than doubled between 2004 and 2008 because of low labor costs and importers’ attempts to reduce reliance on China.

Vietnam became the fastest-growing source of apparel to the American market, according to a US International Trade Commission report. Vietnam also became the second-largest footwear supplier to the US during the period, the report showed.

The country’s ability to increase exports to the US this year has helped narrow the trade deficit and provide some support for the dong. Vietnam was the only one among the top 30 exporters to the US to increase shipments through May.

“Vietnam is politically stable, its workers are skilled and have a high literacy rate, and you don’t have many violations of labor laws, certainly not to the extent as in China,” said Erik Autor, a vice president at the National Retail Federation in Washington. “Retailers don’t want to put all their eggs in the China basket.”

The Southeast Asian country this year passed India to become the third-biggest clothing supplier, based on figures for January to May. Since 2004 it overtook Canada, Honduras, Indonesia, Pakistan and Thailand on the list of garment suppliers to the US, according to full-year figures.

Cost-competitive

“Vietnam is very cost-competitive, and will be for the foreseeable future,” said Autor. “Retailers find Vietnam an attractive place to do business.”

Footwear shipments to the US also more than doubled in the past five years, the biggest increase among the 10 largest shoe providers, the report said. Vietnam has overtaken Italy, Brazil and Indonesia to become the second-largest footwear supplier after China to the American market, from fifth in 2004.

“As with the textiles and apparel sector, US imports of footwear from Vietnam grew rapidly since the normalization of trade relations in 2001, and further accelerated after Vietnam’s accession to the World Trade Organization in 2007,” the US trade commission said in an annual study. “Vietnam has become one of the world’s leading footwear producers.”

It has also begun to export more higher-value goods to the US, with global camera equipment companies shifting their production of lower-end photographic equipment away from China, the US report said.

“Vietnam is moving into other types of manufacturing that add more value,” Autor said. “There’s a diversity of manufacturing in Vietnam.”

Source: Bloomberg

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