Vietnam leads U.S. textile and apparel imports growth in September

U.S. Imports of Textiles & Apparel, 2nd Tier Countries

“Overall apparel import growth used to come from China and Bangladesh, but today Vietnam is the main driver. I don’t think you will see that trend abate in the short term.” Nate Herman, Vice President of International Trade, American Apparel & Footwear Association.

WASHINGTON — Vietnam posted the largest increase in textiles and apparel imports to the U.S. in September compared with a year earlier, as it continued to take business away from other Asian countries such as Indonesia, while Bangladesh showed signs of a slowdown in production, a report from the U.S. Commerce Department showed.

Combined shipments of textiles and apparel from the world to the U.S. rose 5.6 percent to 5.1 billion SME (square meter equivalent) year-over-year. Total apparel imports were up 2 percent to 2.3 billion SME, while textile imports rose 9 percent to 2.7 billion SME.

“Overall apparel import growth used to come from China and Bangladesh, but today Vietnam is the main driver,” said Nate Herman, vice president of international trade at the American Apparel & Footwear Association. “I don’t think you will see that trend abate in the short term.”

Herman said Vietnam is taking some business from China, though it is also pulling business from countries like Indonesia, as well.

Read more …

Womens’ Wear Daily, Nov 14, 2013

U.S. Department of Commerce Textiles AND Apparel Import Data,
Imports by Value (US$)
Imports by Volume (SME – square meter equivalent)
Note: Vietnam is #2 in terms of value (US$), while India is #2 in terms of quantity (SME).

The below charts show U.S. imports of textiles and apparel (US$ billion), 2005 – 2013 and estimates to 2025, if present trends continue. The estimates do not include the expected impact of the TransPacific Partnership (TPP).
Source: U.S. Department of Commerce http://otexa.ita.doc.gov/msr/catV0.htm

Key points

2005 – 2011 (U.S. quotas on imports of textiles and apparel from WTO member countries were eliminated in 2005)

From 2005, when U.S. quotas were eliminated for WTO member countries, imports from China grew rapidly, from about $22.4 billion to $40.7 billion in 2011.

At the same time, imports from “other” countries that lost their protected access to the U.S. market with the elimination of quotas dropped rapidly, from $46.5 billion in 2005 to $32.8 billion in 2011.

Imports from “2nd Tier” countries grew moderately, from about $20 billion in 2005 to about $27.9 billion in 2011.

Vietnam was not a member of WTO until January 2007, so until then had unrestricted access to the U.S. market. Imports from Vietnam increased from $2.9 billion in 2005 to $7.2 billion in 2011, and Vietnam went from #5 in the “2nd Tier” to #1, and second only to China, in just six years.

2011-2025 (does not include the expected impact of TPP)

Imports of textiles and apparel from …

China seem to have peaked and are projected to decline to around $23.7 billion by 2025, if present trends continue.

“Other” countries seem to have stabilized at just over $30 billion and projected to continue at that level to 2025.

“2nd Tier” countries continue to grow, from $27.9 billion in 2011 to $46.3 billion in 2025.

Within the “2nd Tier” countries, Vietnam is projected to have the strongest growth, and to reach $16.4 billion by 2025.

Once again, the projections are based only on the assumption that present trends will continue, and do not include the expected impact of the TransPacific Partnership (TPP).

U.S. Textile & Apparel Imports, 2005-2025

U.S. Imports of Textiles & Apparel, 2nd Tier Countries

U.S. Imports of Textiles & Apparel, 2005 - 2025

Although the above projections are based on present trends and do not include the impact of the TransPacific Partnership, there are two estimates that are based on the TPP.

Le Quoc An, Special Advisor, TPP Textiles & Apparel1. Mr. Le Quoc An, former Chairman of VINATEX and VITAS, was quoted in April 2013  as saying “the proposed Trans-Pacific Partnership (TPP) agreement can double Vietnam’s apparel and textile exports to the U.S.” And in December 2012, he was quoted as follows:  “Vietnam exports US$ 7.6 billion worth of garments to the US. And with the current growth rate, the export turnover would be US$ 13 billion by 2020. However, with the TransPacific Partnership agreement TPP, the figure would be as high as US$ 22 billion.” A core issue of negotiation is the ‘yarn forward’ principle, put forward by the US. The principle, if approved, would require Vietnam to make its garments from raw materials made in Vietnam or the TPP countries in order to enjoy zero preferential tariffs on its garment exports to the US. “The ‘yarn-forward principle’ has prompted investors to inject their money in the textile industry. Textile factories to be set up in the near future would supply Vietnamese garment producers, who would export their products to the US and enjoy the zero export tariff.

Peter A. Petri, Brandeis Univeresity2.  Professor Peter Petri’s detailed economic model study predicted that the TPP (TPP-12, including Japan) would increase Vietnam’s exports from the expected “baseline” in 2025 without TPP of $239.0 billion (of which apparel and footwear exports would total $113 billion) by $67.9 billion to $307 billion (of which apparel and footwear exports would increase by $51.9 billion to $165 billion). In percentage terms, total exports would increase by 28.4% over the baseline, and apparel and footwear exports would increase by 45.9% over the baseline. Click the link above, and go to slide 17.

As shown in the table below from slide 17 of Professor Peter Petri’s presentation at the CCI WTO Center on Mar 28, 2013, the largest export increases would come in the below sectors (US$ billion).

ItemBaseline 2025Increase byIncrease to% Increase
Textiles$26.0$12.9$38.949.6%
Apparel, Footwear$113.0$51.9$164.945.9%
Machinery$14.4$2.0$16.413.0%
Total Exports$239.0$67.9$306.928.4%
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