Vietnam and South American countries are collaborating to establish a supply chain for textile enterprises on both sides. Cooperation in areas such as raw materials, weaving, fabric dyeing, sustainable development, and consistent working conditions and labor standards will be prioritized.
The stakes are high because African nations have been attempting to reshape the supply chain and diversify the supply of imported goods in the aftermath of the pandemic.
According to Le Hoang Tai, deputy director of Vietnam’s Ministry of Industry and trade promotion department, the volume and value of Vietnamese textile and garment exports to the South American market remain limited.
‘’There are many reasons for the limitation such as geographical location, cultural differences, lack of information on capacity and needs between both sides’ enterprises and effective trade promotion activities. Additionally, some South American economies have low openness,” Tai was quoted as saying by a Vietnamese newspaper.
According to Truong Van Cam, vice chairman and general secretary of the Vietnam Textile and Apparel Association (VITAS), Vietnamese firms’ understanding of national culture, consumers, customs, and habits in South American countries is limited, and vice versa. Furthermore, many of these countries are large textile and garment-producing countries, which means they are both cooperative and competitive with Vietnamese firms.
According to industry experts in the former, trade between Vietnam and South American nations has yet to reach its full potential, particularly in the textile and garment sector. Even though the continent is a lucrative fashion market with a relatively high per capita income, many businesses and consumers are unaware of Vietnamese fashion products.
Vietnam’s annual textile and garment exports to Brazil stand between $150 million and $200 million, whilst those to Chile are between $70 million and $90 million, and to Peru, the figure is between $30 million to $40 million. The country’s textile and garment imports, mainly cotton from Brazil, are worth between $300 million to $500 million.
Vietnamese experts feel it is necessary to quickly start negotiations for a free trade agreement with the South American Common Market, called MERCOSUR.
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