HANOI, Mar 21, 2020, The Hanoi Times. The growing numbers of order delays and cancellations are purely based on decisions of buyers from these markets as the Covid-19 pandemic is taking its toll on the US and EU economies. The EU and US have not put any restrictions on Vietnam’s textile-garment imports, said Minister of Industry and Trade Tran Tuan Anh, The Hanoi Times reported.
The growing numbers of order delays or cancellations are purely based on decisions of buyers from these markets as the Covid-19 pandemic is taking its toll on the US and EU economies, Anh said at a meeting on March 20.
Ta Hoang Linh, head of the European–American Market Department under the Ministry of Industry and Trade (MoIT) added the ministry has immediately contacted the EU’s Delegation in Vietnam and the US Embassy to clarify the situation.
According to Linh, the EU’s decision to shut external borders is aimed at protecting its citizens from the Covid-19 pandemic, while the movement of goods to the EU remains as usual, particularly essential necessities such as medicine and food.
This policy does not impact Vietnam’s trade relations with the bloc, said Linh.
Similarly, the US Embassy said the country does not impose any restrictions to Vietnam’s imports, Linh stated.
Minister Anh, however, acknowledged the cancellation and delay of orders from these two markets are a big concern for local companies, particularly as both are major markets for Vietnam’s textile and garment products and account for 70% of the industry’s exports.
Director of the MoIT’s Industry Department Truong Thanh Hoai said importers from the US and EU are seeking for delay of delivery in March and suspending orders in April and May. This would put garment-textile firms under a difficult situation, which could have large social impacts as the industry employs over two million workers.
Hoai suggested that the government should reschedule debt payment for enterprises of this industry in a longer period compared to other sectors.
Meanwhile, local enterprises could seek alternative markets for their products, particularly in China, South Korea or Japan, which are recovering from the pandemic.
In 2019, Vietnam recorded a trade surplus of nearly US$26.6 billion with the EU, with major contribution from textile and garment, footwear, agricultural products and machinery, among others.
Vietnam also exported textile and garment products worth nearly US$15 billion to the US last year, the figure stood at nearly US$2.3 billion during the first two months of 2020 despite impacts of Covid19, according to statistics from the General Statistics Office.