Vietnam is undergoing a makeover consisting of social improvements, environmental wellbeing, and a focus on specialization and modernization. These improvements are expected to catapult Vietnam to a spot among the top five clothing and textile exporters in the world.
The economic growth has been markedly steady for the last seven years. Between 2005 and 2011, the value added rate of Vietnam’s textile and clothing exports rose from 30.2% to 47.8%, according to Textile Outlook International.
Last year, however, Vietnam experienced slower growth, due most likely to the economic troubles of its target markets, the U.S. and E.U. Even so, the growth took the textile giant from $14 billion to $16 billion.
In order to continue the upward momentum, the Vietnamese government has implemented incentives to attract foreign direct investment. Furthermore, Vietnam recently secured free trade agreements (FTAs) with various countries and regions. Another huge contributor to the growth is the country’s membership with the Association of Southeast Asian Nations (ASEAN) and the benefits it reaps from the Asean-China Free Trade Area (ACFTA).
Vietnam benefits from FTAs with Australia and New Zealand, India, Japan, and South Korea. Also, it has bilateral FTAs with Israel and Japan.
Yet another boost is on the horizon as , Vietnam has entered into negotiations with the EU to sign a comprehensive FTA. Most importantly, it has entered into negotiations to be part of the Trans Pacific Partnership (TPP), which aims to establish a free trade area for the Asia Pacific region.