For Vietnamese export businesses, the key to entering the US market is to obey the set standards and requirements, experts have said at a recent seminar held by the American Apparel & Footwear Association (AAFA) and Amcham Vietnam in HCM City.
Product safety, responsible sourcing, adherence to all regulations and transparency are all key factors for a successful and trusted supply chain.
Jon Fee, a senior trade consultant at Alston & Bird LPP, said that Vietnam remains the second largest apparel and footwear exporter for the US market second only to China
Vietnam’s export growth to the US has continued to surpass other rivals in the US clothing market although the country has not benefited from any trade preferences or any free trade agreement. In the 12 months leading up to August 31, 2017, the US imports of apparel and footwear from Vietnam increased 8.74% and 11.83%, respectively.
US retailers and consumers appreciate the advantages of buying Vietnamese products because of good quality, reasonable price, and commitments of delivery on schedule.
Vietnam’s garments and textiles are taking the lead in export turnover to the US. According to statistics from the General Department of Vietnam Customs, in the first nine months of this year, Vietnam exported US$9.25 billion worth of clothing goods to the US, up 9.5% against the same period last year and accounting for nearly 30% of the country’s total export value to the market.
The country’s footwear exports to the American market also surged an impressive 13.7% to US$3.7 billion, making up 12% of total value of Vietnamese exports.
Up until the end of September 2017, Vietnam has accrued a trade surplus of US$24.1 billion, equivalent to 78% of the country’s total export turnover to the US market. Experts predict that Vietnam- US bilateral trade will grow steadily in the near future. The US has been the largest importer of Vietnamese goods over recent years. It is also the market that Vietnam has recorded the highest trade surplus.
The country’s total export turnover of goods to the US in the nine-month period surged 9.4% to close to US$31 billion against last year’s same period.
Vietnam has eight groups of exported goods with turnover reaching more than US$1 billion, including garments and textiles, footwear, telephones and components, wood and wooden products, computers and electronics, machinery equipment, spare parts seafood, umbrellas and suitcases.
Imports from Vietnam make up a small proportion
In 2016, Vietnam’s total export turnover of goods to the US market increased 14.9% to US$38.45 billion compared to a year earlier, constituting 21.8% of the country’s total export value. However, the figure is still low compared to the total value of goods imported by the US from other countries and the US is considered a potential market for more Vietnamese goods.
According to statistics from the United Nations Statistics Division, in 2016, the total import value of the US stood at US$2.450 billion with imported Vietnamese products only making up less than 2% of the total import value.
Nate Herman, Senior Vice President of Supply Chain under the American Apparel & Footwear Association said Vietnam’s export turnover to the US market came 12th but total taxes levied on goods placed second, after China.
In the first eight months of the year, Vietnam had taxes levied on goods amounting to US$2.2 billion, ranking second among top 15 nations paying the highest import tax to the US market, again second only to China.
China exported goods worth US$318 billion and had to pay US$8.85 billion. Vietnam is the second largest exporter of apparel and footwear to the US behind China.
The total import duties Vietnam has to pay to the US made up 10.11% of the US total tax collections in the first eight months of the year. Many Vietnamese goods have suffered high import duties in the US market, in particular apparel goods, which see a high import tax rate of 17%.
The US withdrawal from the Trans-Pacific Partnership (TPP) could leave Vietnam bereft of its biggest customer for exports, experts said. Therefore, the country needs to expedite negotiations on the Regional Comprehensive Economic Partnership (RCEP) and the Vietnam-EU Free Trade Agreement to help businesses enjoy preferential tariffs and increase export possibilities to more other markets than the US.
In addition, businesses should pay greater attention to market criteria to seek more outlets going forward.