The rise was lower than the targeted growth of 10 per cent this year.

In May, the industry earned $1.75 billion, up only 3.8 per cent.

The United States was the largest export market of the industry, with $3.4 billion, up 6 per cent. The European Union, Japan and South Korea followed with $936 million, $845.17 million and $677.2 million, respectively.

Industry insiders are concerned with meeting the industry’s export target of $31 billion this year due to falling export prices and difficulties in finding new export contracts, especially for shirts, pants and jackets.

Than Duc Viet, deputy general director of the Garment No.10 Corporation, said this year’s business results for local textile and garment exporters, especially among small- and medium-sized firms, were not as good as expected due to rising input costs and falling demand.

The chairman of the Vietnam Textile and Apparel Association (Vitas), Vu Duc Giang, said some traditional customers of Vietnam’s garment exporters were moving their orders to Laos and Myanmar, which have preferential tax rates for exports to the United States and European Union.

Free trade pact

Currently, the tax imposed on Vietnam’s textile and garment exports to the United States averages 17 per cent, while the rate to the European Union is nearly 10 per cent. The taxes are expected to drop to zero by mid-2018 when the Trans-Pacific Partner-ship and Vietnam-EU Free Trade Agreement take effect.

Giang said domestic textile and garment exporters will therefore have to compete fiercely against producers from Laos, Myanmar, Cambodia and Bangladesh.

Vitas said export growth rates among these producers were rising faster than in Vietnam.