| Viet Nam has emerged as one of the leading textiles exporting countries worldwide in recent years, becoming the fourth apparel exporting country in 2019 (by value – 30.6 billion USD)(1). The Vietnamese garment and footwear industry accounts for 16% of the country total exports, employs 2.5 million workers. The growth of the garment and footwear sector was also boosted by Viet Nam’s increased integration into Global Value Chains (GVCs), through the coming into force of a number of trade agreements, including, the Progressive Agreement for Trans-Pacific Partnership (CPTPP) (2019), the EU – Viet Nam Free Trade Agreement (EVFTA) (2020), or the UK –Viet Nam Free Trade Agreement (UKVFTA) (2021).
However, the COVID-19 crisis has exerted a substantial toll on economies and societies. Worldwide, general and targeted lockdown measures were implemented to contain the outbreak, which paused sections of the global economy, resulting in global trade declining by over 15% in the first half of 2020. These disrupted GVCs, leading to business closures, insolvencies and increased unemployment rates, and this perhaps nowhere more so than in the garment & footwear sector.
In Viet Nam in particular, the initial impact of GVC disruptions has been twofold. First, Viet Nam’s economy experienced falling international demand for manufactured goods, which placed manufacturers in difficulty for meeting their wage bill as orders were cancelled or not placed. Second, the disruption of GVCs interrupted Viet Nam’s material imports, so there would be difficulty fulfilling even those orders that were placed.
As Viet Nam’s garment and footwear sector recovers from the Covid-19 impact, adopting and integrating RBC standards throughout the sector is the key to unlocking future opportunities outside of the context of the pressing and immediate risks posed by the pandemic.
About The Responsible Supply Chains in Asia (RSCA) Programme
The workshop is part of the Responsible Supply Chains in Asia Programme (RSCA), a partnership between the European Union (EU), the International Labour Organization (ILO) and the Organisation for Economic Co-operation and Development (OECD), funded by the European Union. The RSCA works with partners in Asia to promote responsible business conduct in global supply chains.
The overarching objectives of the RSCA Programme are to promote smart, sustainable and inclusive growth by ensuring that investors and businesses have a better understanding of corporate social responsibility; and to create policy environments conducive to promoting responsible business conduct and increased opportunities for dialogue. The programme is taking place in partnership with six Asian economies, namely Japan, China, Thailand, Viet Nam, Philippines, and Myanmar.
For the full concept note – click on – Webinar: Integrating Responsible Business Conduct to Create a Resilient Garment Industry.
(1) Ministry of Planning and Investment (2021), Vietnam earns nearly 19 billion from textile exports in H1, https://www.mpi.gov.vn/en/Pages/tinbai.aspx?idTin=50976 |