Solutions to promote export of garments of x20 joint stock company to the european market under the implementation of the vietnam european union free trade agreement (EV FTA)

Introduction The process of economic integration among countries in the world is currently taking place extensively, where export is a factor playing an important role in that integration process Export creates the main source of capital for imports, contributing to restructuring the economy and promoting production Export also contributes to creating jobs and improving people's lives, increasing national income, thereby increasing GDP and domestic consumption Garments are one of the key products of Vietnam Business activities in the market economy often contain many opportunities as well as risks, especially in export activities How can one be successful in the garment product business in the EU market? That is an issue that export business entities are interested in Besides, what are the barriers that EU enterprises need to overcome in order to penetrate and develop in the EU market? X20 Joint Stock Company - formerly known as Garment Company 20 – was a unit specializing in production of garments for the military It has then expanded production to the field of knitting, weaving recently, due to the need of change in production and business models By diversifying business lines, the company has completed the mechanism to switch to exporting garments Export is now the main activity that renders profits to the company, therefore increasing the efficiency of the export business is a vital task of the company Moreover, Vietnam is in the process of comprehensive renovation in every aspects, especially in terms of economy and politics In the current context, export promotion is being encouraged more strongly than ever Vietnam is considered one of the countries with the fastest integration speed in the world From 2001 to the present, Vietnam has signed a Bilateral Trade Agreement with the United States (BTA), joined the World Trade Organization (WTO), and signed trade agreements as a member of ASEAN with Japan, China, Korea, Australia, New Zealand, and India Notably, the newly signed Vietnam - Europe Free Trade Agreement (EV-FTA) in early 2020 has opened up a lot of opportunities and incentives for many export items of many industries, including garments Recognizing the significant role of export in production activities of the company, I have chosen the topic "Solutions to promote export of garments of X20 Joint Stock Company to the European market under the implementation of the Vietnam-European Union Free Trade Agreement (EV-FTA) ” In the article, I have given some theories about export activities such as concepts, roles, influencing factors After a period of direct contact with production - export activities of the company, I have realized a number of advantages and limitations in exporting activities of the company, from which I have also provided analysis and some solutions to help the company overcome the limitations, and at the same time take full advantage of the strength to grow continually and sustainably under the signing EV-FTA agreement The urgency of the topic Currently, the process of international economic integration is taking place extensively Since signing the Trade Agreements, Vietnam has more opportunities to exchange and develop economy with countries around the world Vietnam's economy has been gradually changing, and one of the basic activities to promote the integration process is export Export activities contribute to restructuring the economy, promoting production and development, creating conditions for other industries to develop In fact, in recent years, Vietnam has affirmed its position in the garment industry, being one of the export industries that brought the major source of foreign exchange in the country's industrialization process However, with the growing development of the garment industry, domestic enterprises engaged in textile and garment export activities also revealed many shortcomings X20 Joint Stock Company is a garment exporting enterprise During my internship at the company, I realized that there were still limitations in the company's export performance Since then I have chosen the topic "Solutions to promote export of garments of X20 Joint Stock Company to the European market in the context of the implementation of the Vietnam-European Union Free Trade Agreement (EV-FTA ) ”, to provide an analysis of the new export context of our country at present, as well as to make several proposals to overcome the limitations and contribute to improving the export efficiency of enterprises Research purposes - Systematize theoretical bases on export and export business efficiency - Assessment of conditions in the Vietnam - European Union Free Trade Agreement (EVFTA) - Analyzing and assessing the status of garment export activities of X20 Joint Stock Company - Proposing several solutions to improve the export business efficiency of the company shortly Subject of the study Export activities of X20 Joint Stock Company Scope of research Scope of space: X20 Joint Stock Company Time range: Research data for the years 2015-2019 Research method Methods of data collection: Collection of primary and secondary data, descriptive statistics Methods of analysis and data processing: Methods of proportional analysis, comparison method, balanced contact The structure of the thesis The thesis consists of chapters: Chapter : Chapter : Chapter : Chapter : Chapter 1: General theories of garment export 1.1 Export overview 1.1.1 Concept and characteristics of export “Export of goods is the sale of goods and services to another country on the basis of using currency as a means of payment, with the goal of profit The currency here may be a foreign currency for one country or many countries” The purpose of this activity is to acquire a foreign currency based on the exploitation of comparative advantages of each country, when the exchange of goods between countries is beneficial, the countries are actively involved in expanding this activity Since export is a part of international trade, it also has characteristics and relates to other international trade activities such as international insurance, international payments, international transportation, etc Export activities are not the same as domestic trading in the characteristics of the participation of foreign partners, the goods serving the consumption demand outside the territory Export activities take place in all fields, in all conditions of the economy, from exporting consumer goods to production materials, machinery and high-tech equipment All of these activities are aimed at benefiting the nation in general and the participating businesses in particular Export activities take place widely in space and time It can take place in a very short time but can last for years, can take place within a country or many different countries 1.1.2 The role of export Export activities bring many benefits to the nation It not only benefits businesses but also contributes to boosting domestic production by accumulating foreign currency earnings for the country, promoting the creativity of economic units through international competition Import and export business is also a means to exploit the advantages of nature, geographical position, human resources and other resources In addition, export activities also promote international cooperation between countries and accelerate the process of global economic integration - For the national economy Export is one of the factors creating momentum, promoting the growth and economic development of each country Most theories about economic growth and development confirm and specify that for growth and development, each country needs four conditions: human resources, resources, capital, and technology But most developing countries (like Vietnam) lack capital and technology So the question that must be answered is how to get capital and technology? Exports create a source of capital for imports to serve the industrialization and modernization of the country For every developing country, the most appropriate step must be to industrialize and modernize the country to get rid of poverty and backward development However, the industrialization process requires a large amount of capital to import advanced equipment technology To obtain imported capital, the former countries have used the following main sources of mobilized capital: + Foreign investment, borrowing from aid sources + Revenues from tourism activities, foreign currency collection services in the country + Income from export activities The importance of foreign investment is undeniable, but raising this source is not easy To use this source of capital, the borrowing countries will suffer disadvantages, face many unfavorable conditions, and will have to make commitments with the lending organizations/countries in the future Exporting, therefore, is an activity that creates a very important source of capital + Export creates a premise for import, deciding the scale of the growth rate of import activities In some countries, one of the main causes of underdevelopment is due to the lack of capital potential, so the external capital is essential, but all opportunities for investment, debt, and aid of foreign countries are only advantageous when investors and lenders see the ability to produce and export - the only source of capital to pay debts into reality + Export promotes economic restructuring, production development Under the impact of exports, the world's production and consumption structures have changed drastically Exports move countries' economic structures from agriculture to industry and services There are two perspectives on the impact of exports on production and economic restructuring: Firstly, only export the surplus products compared to the domestic demand In the case of an outdated economy and production retardation, not enough to consume, if only passively waiting for a surplus of production, exports are limited in small scale and growing slowly, Therefore, manufacturing industries will not have opportunities to develop Second, base on the world market to produce and export This view has a positive impact on economic restructuring to boost exports: + Exports create a premise for industries to develop together This can be for example, when developing the export garment industry, other sectors such as cotton, spinning, dyeing, etc will have favorable conditions for development The raw materials produced locally will be much cheaper than imported, moreover this proves the position of the garment industry, paving the way for export products of uniform quality + Export facilitates expanding product market, contributing to stabilizing production, creating advantages thanks to scale When bringing Vietnamese products to other markets and being known by consumers, it will increase demand and boost the production of such products When the item has a certain number of customers, the production line will also be operated continuously and the scale can be expanded to meet the requirements of customers + Export facilitates the expansion of the supply of inputs for production and the expansion of a country's consumer market When manufacturing a product, businesses must consult and search for similar items and models to estimate what materials to enter to improve quality and product design When doing this activity, raw materials will be richer gradually with each item This allows a country to consume all the goods in quantities that are many times greater than the country's production capacity, even those that they cannot produce + Export contributes to promoting specialization, increasing the production efficiency of each country, aiming to develop strongly in width and depth In today's modernized globalized economy, each product is researched and tested in the first country, manufactured in the second, assembled in a third country, and consumed in the second Those investments and products were eventually paid in the fifth country Thus, the goods produced in each country and consumed in one country show the opposite effect of specialization on exports With the important feature that the currency is used as a means of payment, exports contribute to increasing a country's foreign currency reserves Especially for developing countries, where currencies are not convertible, foreign currencies earned from exports play an important role in regulating the supply of foreign currencies and stabilizing production, thereby contributing to economic growth and development + Exports have a positive impact on creating jobs and improving people's lives In terms of jobs, exports attract millions of workers through the production of exports On the other hand, exports create foreign currencies to import consumer goods to meet the increasingly diverse and abundant needs of the people Therefore, consumers will be able to use many products with better quality as well as higher usability + Export is the basis for expanding and promoting the development of external economic relations Export and external economic relations, diplomacy has mutual interaction, interdependence Export activities are a solid foundation to build external economic relations in the future, thereby leading to other development relationships such as international tourism, international insurance, international credit, etc On the contrary, the development of these industries back impacts on export activities as the infrastructure for export development It can be said that exports in particular and international trade activities, in general, will lead to changes in the consumption of goods in the economy in two ways: + Allow more consumer goods than manufactured goods + Bringing beneficial changes in accordance with the characteristics of production However, depending on the specific conditions of each country, the effects of exports on countries are different - For Businesses Along with the booming of the global economy, the trend of reaching out to the international market is a common trend of all countries and businesses Exporting is one of the familiar ways for businesses to implement their expansion, development, and expansion plans + Export creates favorable conditions for businesses to expand the market Thanks to exports, the name of the business are known not only to domestic customers but also to foreign markets Export creates foreign currency sources for businesses, increasing reserves thereby improving the ability to import, replace, supplement, upgrade machinery, equipment, raw materials to serve the development process + Exports promote the creative dynamism of import and export officers as well as participating units Exports require businesses to always innovate and improve their business administration, actively seek and develop aspects of their ability to export markets where they can penetrate It also helps businesses extend the life and life of a product The inevitable export is leading to competition and mutual monitoring among units participating in export at home and abroad This is one of the reasons forcing exporters to improve the quality of exports, businesses must pay more attention to lowering the price of products, thereby saving the top factors, or in other words, saving resources Producing exports helps businesses attract more workers to create a stable income for the lives of officials and employees and increase profits Enterprises carrying out export activities have the opportunity to expand business and business relations with many foreign partners based on mutual benefits + Export helps businesses improve product quality When looking for export directions to international markets, your products must first meet standards, meet international requirements, as well as satisfy partners Therefore, businesses will always have to explore, research, and try to improve their products with good quality to be able to sell at the best prices 1.1.3 Different forms of export The export of goods is carried out in many different forms, this is based on the characteristics of goods ownership before export, based on the current source of export goods Foreign trade enterprises usually conduct some of the following export forms: - Direct export A direct export is a way of exporting goods in which foreign trade enterprises invest capital by themselves to buy products from domestic producers and then sell these products to customers in foreign countries (possibly through several processing stages) Under this form of export, foreign trade enterprises that want to have goods for export must have the capital to collect goods from localities and domestic production establishments When an enterprise invests capital to purchase goods, it will belong to the enterprise This form does not go through any intermediary organization, can directly meet together to discuss and discuss to lead to a contract or not need to meet in person, but through offers, emails, fax, electricity, phone, etc can also form a contract of sale When participating in direct export, several jobs must be well prepared, such as thorough research on customers, types of goods to be traded, transaction conditions to be exchanged, clear objectives, and requirements of Work Select qualified people to participate in the transaction, considering the number of goods and services necessary for the transaction to be effective - Export at site This is the form of business that exports in its own country to collect foreign currencies, through the delivery of goods to businesses operating in its territory as directed by the foreign side, or it may also be sold through export processing zones or export processing enterprises operating within its territory The characteristics of this form of export are that the signed contract is a foreign trade contract, goods and supplies are the objects of sale and purchase of the contract of exportation out of the territory of Vietnam, enterprises must fully implement the customs procedures for on-the-spot export such as the opening of on-spot import and export customs declarations and other procedures for a tax refund - Entrusted export This is a form of business in which the import/export unit acts as an intermediary instead of the production unit, which signs the export contract, carries out the necessary procedures for export, thus the manufacturer and thereby enjoy a certain amount of money called a trust fee The feature of this type is that the trustee does not need to invest capital, does not need to apply for quotas, the value of goods that the entrusted signs a contract will only be included in the export turnover but not in the business collection Normally, enterprises that not have the necessary information about foreign markets, or have a small business scale, limited resources or face many barriers from the state will apply this form of export Businesses can be indirectly exported (entrusted) through export trade companies, professional exporters, consolidating organizations and exporting, or through another company to export according to their marketing channel - Commercial convection Convection trade is one of the export transaction methods in export combined closely with imports, the seller is also the buyer, the amount of exchange with each other has equivalent value In this mode of export, the objective is to obtain an equivalent amount of goods Because of this feature, this method also has other names such as associated import and export, or barter - Exporting goods according to a protocol This is a form of exporting goods (usually to assign debt) that is signed under a protocol between the two governments This is one of the export forms that businesses save money on market research: find customers without payment risks This form of export accounts for a very small proportion Usually, in the former socialist countries and some countries, there is a close relationship and only in some state enterprises - International processing This is a business method in which one party calls the processor of raw materials or semifinished products of another party (called the processing party) to process the finished product and deliver it to the ordering party and after that receives remuneration (called processing fee) This is one of the export forms that are developing strongly and many countries are paying attention to its benefits For outsourcing party: This method helps them take advantage of cheap prices, raw materials, and labor of the processing country For processors: This method helps them to create jobs for domestic workers or import new equipment or technology to their country to build a national industry like South Korea, Thailand, Singapore, etc - Temporary import for re-export This is a form of export abroad of goods that have been previously imported, unprocessed in the country of re-export through re-export contracts including import and export to earn a larger amount of foreign currencies originally spent This contract always attracts exporting, re-exporting, and importing countries So people call the re-export transaction a tripartite transaction or a triangle transaction Re-export can take the following forms: Re-export in the true sense, in which the goods go from the exporting country to the reexporting country, and then re-export from the re-exporting country to the importing country Opposite to the movement of goods is the movement of money originating from the importing country to the re-exporting country and quickly being transferred to the exporting country The re-export business requires a keen sense of the market situation and prices, and the accuracy and rigidity of trading activities Therefore, when the enterprise conducts export in this mode, it is necessary to have highly qualified staffs 1.1.4 Export process When conducting export, businesses must comply with all procedures in the export process to ensure the number of goods intact during transportation as well as the delivery time commitment The steps in the normal export process will take place as follows: 10 The EU is currently the second largest trading partner of Vietnam A prominent feature of the import-export structure between Vietnam and the EU is the very large complementarity, which is less of direct competition EU investors are present in almost all important economic sectors of Vietnam, focusing on industry, construction and some service industries Therefore, the signing of Vietnam-EU free trade agreement will open opportunities for both sides Among these are opportunities for Vietnamese businesses: - Opportunities to expand the market, promote the export of goods to the EU market Through this agreement, it will create better conditions for Vietnamese businesses to access the European market, a large market with about 500 million people and bring many benefits to Vietnamese businesses such as tax exemption with At least 90% of Vietnam's export tax lines to the EU Through the signing of EVFTA, Vietnamese businesses can approach and conduct trading with other partners with free trade agreements with the EU However, according to Vietnamese economic experts, the FTA between Vietnam and the EU is also a big challenge for Vietnamese businesses if they not change to adapt The signing of free trade agreements will further expand opportunities for Vietnam's economy but it also shows that Vietnam's economy integrates more and more deeply into the world economy Given the current conditions of Vietnam, it is clear that Vietnam is susceptible to impacts and impacts of other changes in the international arena - Opportunity to import advanced and advanced machines, equipment and technologies from the EU market Some previous industries that Vietnam had to import inputs or products from some neighboring countries in the region such as China and Thailand when EVFTA was signed, it would be an opportunity to help Vietnam Can redirect, import to EU countries This will cause domestic businesses to face relatively large competitive pressure However, many views argue that for an economy that is highly complementary to the Vietnamese market such as the EU, opening the Vietnamese market to EU exporters and service providers is not necessarily a disadvantage for Vietnam EVFTA allows Vietnamese businesses and people to buy goods and services with competitive prices, good quality, and advanced technology, thereby allowing them to increase the competitiveness of Vietnamese products To a certain extent, this also helps Vietnam avoid relying too much on a supply of shoddy and volatile like China - Opportunities for self-improvement of production processes and product quality improvement 61 When EVFTA is signed, it will create a legal basis for trade activities for Vietnamese goods exported to Europe, meeting the quality and safety standards that this market requires Commitments in areas such as trade remedies (anti-dumping, anti-subsidy, safeguard), technical barriers in trade (TBTs), sanitary and phytosanitary measures food safety (SPSs) have had certain impacts on Vietnam's exports to the EU market in recent years, which are expected to have more positive effects, bringing significant benefits for Vietnam's exports shortly With the main content of not committing to specific regulations on specific issues but focusing on establishing a cooperation mechanism to make transparency and quickly handle disputes arising, EVFTA will contribute to improving the process of implementing the relevant regulations (the opportunity to comment more on the enactment or revision of EU regulations, the opportunity to mildly resolve problems arising during the application process ) Businesses themselves also have the opportunity to learn, approach and express their views related to these EU regulations This is also a good opportunity for Vietnam to join this agreement - Opportunities to access investment capital, modern technology, expand business opportunities More and more EU companies are choosing Vietnam as their investment destination Vietnamese companies often lack know-how, technology and capital Meanwhile, this element is relatively available in European companies Besides, labor costs in Europe are quite high, much different from Vietnam's labor costs This makes the competitiveness of European businesses is not high In contrast, the cost structure of Vietnamese businesses is quite attractive, Vietnam's advantages are quite diverse, better labor quality as well as better protection of intellectual property rights than other countries other in the area Through EVFTA will contribute to strengthening bilateral trade and investment cooperation Currently, Vietnam is adjusting its strategy to attract FDI (foreign investment capital), focusing on the quality of investors with the ability to transfer new technologies The EU is a fully capable partner to meet the requirements Bridge it The EU has also been an important supplier of official development assistance (ODA) to Vietnam for many years At the same time, Vietnamese consumers will have the opportunity to use good quality goods from the EU with more reasonable prices 4.1.2 Difficulties Besides the opportunities, EVFTA also puts Vietnamese businesses in a series of challenges, including the implementation of commitments in EVFTA on institutional issues and legal policies behind the border , business environment and policies, and laws 62 According to the attached commitments, the requirements on rules of origin are also very strict Normally, for goods that want to enjoy tariff preferences, the raw materials must meet a certain percentage of internal content (material originating in the EU or Vietnam) To meet the requirements of rules of origin under EVFTA, products exported from the EU must meet the fabric requirements made in Vietnam or from the EU, or from a third country that already has FTA with Vietnam and the EU The rate of making use of bilateral cumulative rules of origin (importing fabrics from the EU for production and then exporting finished products to the EU) is very small because EU fabrics are very expensive and the transportation costs are high, moreover Most of the raw materials are from foreign countries, of which 39.34% is from China According to the Vietnam Chamber of Commerce and Industry - VCCI, currently, the knowledge about the EVFTA Agreement of the Vietnamese business community is not much Moreover, the ability to change to suit EVFTA is also quite limited when up to 40% of enterprises find it difficult to improve working conditions; 55% of enterprises find it difficult to invest in new technologies; 59% of businesses find it difficult to meet the localization requirements However, the competitive pressure that EVFTA brings is considered to be healthy, selective, and appropriate competition pressure Therefore, EVFTA is also an opportunity and reasonable pressure for Vietnamese businesses to adjust, change their business methods, and improve their competitiveness The EU market is increasingly demanding of logistics services, exporting enterprises in the garment industry in Vietnam need to be very flexible to meet these requirements Delivery on time is also important for exporters Prestige is of special importance, especially for businesses in developing countries like Vietnam, if it is discredited, businesses will easily be excluded from the market Vietnam's garment industry is under pressure to change to survive and develop, so a deep penetration into the global value chain is essential for the textile industry to improve its competitiveness in the world market gender and improve export value The review of Vietnamese laws on specialized management with EVFTA commitments on customs and trade facilitation shows that in the overall Vietnamese law, the majority of laws are compatible with EVFTA requirements However, in comparison with the general customs legislation, the percentage of EVFTA commitments that Vietnamese law on specialized management is not fully or partially compatible is very high Specifically, the provisions on the commitment to simplify procedures, the principle of risk management, on post-clearance inspection, and to commit an administrative document This means that the core procedures in specialized management of Vietnam currently not follow modern 63 international standard practices reflected in EVFTA (similar in CPTPP and TFA Agreement of the WTO) ) Another difficulty that can be mentioned in the consumer tastes, consumer-style, language, the business culture of each country, and each region, while goods entering the EU market are circulated on all 27 countries Thus, creating a product and bringing the product into a country and having to adapt to the remaining 26 countries is a big challenge for Vietnamese businesses The third difficulty of Vietnamese garment enterprises is that the EU market has many strict technical regulations with the aim of protecting human health and the environment, in particular, the regulations on chemical use matter The garment industry is one of the industries that use a lot of chemicals All kinds of clothes and accessories contain many different chemicals such as dyes, bleach, etc Up to now, Vietnam has quite adequate legal provisions on hygiene standards and techniques to protect health healthy people, but these standards are not as high as EU standards In some key export sectors such as textiles and clothing, Vietnamese manufacturers have met EU SPS and TBT standards However, there are still cases of violations of these regulations and many Vietnamese consignments have been rejected when exporting to the EU Therefore, it is clear that Vietnam's readiness is still limited This will create a big challenge for businesses if they want to exploit the EU market when EVFTA comes into effect, manufacturers, exporters, importers, and traders of garments with EU sales must consider and regulatory compliance Besides, the EU is still looking for ways to maintain the protection policy of internal production The rapid export growth of any product into the EU can lead to undesirable consequences that the EU will take safeguard and anti-dumping measures This is also one of the difficulties for Vietnamese garment enterprises because they have to find ways to increase market penetration and calculate at a reasonable level to not be the object of protection measures Thus, the challenge of Vietnamese garment enterprises is to succeed, they have to switch to producing higher value-added products by upgrading their capacity Threats of trade remedies: Normally, when tariff barriers are no longer an effective tool to protect, enterprises in import markets tend to use more anti-dumping measures price, countervailing subsidy, or safeguard measures to protect the domestic industry And the EU is also one of the "traditional" markets to use these tools The main activity of garment companies is processing, so the investment in fixed assets is relatively large However, the scale of working capital of garment enterprises is mainly small and medium enterprises, which meet difficulties and obstacles in production 64 business Typically, the ability to access loans and investment capital is limited, mainly using loans from credit institutions, although interest rates have decreased, banks' ability to disburse capital has not high Some businesses have not been proactively formulating loan plans or projects or the purpose of loan capital is not valid, there is no collateral or collateral but not enough for the loan Moreover, labor costs are cheap, but the average cost per unit of product is still higher than that of India, China, Indonesia up to 30% 40% Labor productivity in our country is low and only 2/3 compared to other countries in the region Therefore, businesses need to improve labor productivity further to lower production costs The commitment to comply with the rules in EVFTA is a big obstacle for export goods to enjoy tax incentives in this market The EU is the largest textile and apparel import market in the world and the second-largest export market for Vietnamese textiles and garments (after the US) but the growth rate of textile and apparel export turnover to the EU as well as The importance of textile and apparel imports into the EU is still small, which shows that the competitiveness of Vietnamese textile and apparel products still has problems EVFTA negotiation and signing are aimed at creating more conditions to help businesses improve their competitiveness in this market In recent years, the export of textiles and garments to the EU has faced many difficulties because the EU market is a "fastidious" market, with a small number of orders and not as large as the United States Also, importers tend to buy packaged products instead of outsourcing so most businesses are not yet competitive 4.2 Solutions to promote garment export of garment company X20 to the European market 4.2.1 Solutions related to supply Designing is the job that needs to be combined with investigations, market research, identifying consumer trends to create products that satisfy customers When researching foreign markets, businesses need to pay attention to the following factors: market size, growth rate, market power, consumer ability, distribution channel, legal issues related to import goods into that market Thereby, businesses determine what is the key segment that businesses should focus on, assess the difficulties and advantages that businesses encounter when doing business Next, businesses need to consider specific issues such as service customers, consumer characteristics of this market, the ability to consume objects, competitors 65 Consumers will choose to buy your product if they know your name Therefore, when penetrating the market, it is extremely important to create a brand, a name as well as a distinctive image for a product, bringing that brand into the hearts of consumers Customers' trust in products is the main factor driving increased consumption, which is an important condition for expanding production and boosting exports Chinese products appearing on the world market with the trademark "Made in China" have become increasingly familiar and contributed to affirming the potential and position of Chinese products Meanwhile, products with well-known brand names in Vietnam are only small, sporadic in the international market, not have a firm foothold, this is a disadvantage for Vietnamese products When Vietnamese goods are mainly processed for export, but associated with the names of foreign intermediaries such as Pierre Cardin, Youth, Polo, Hangsin, etc This may have immediate benefits and solve difficulties in terms of technology, management level, employment for workers but in the long run, it will be detrimental because foreigners consume products from the company but not know it is produced by Vietnamese enterprises and such so the company accidentally missed the opportunity to introduce themselves to the world Invest in renovating equipment and machinery to help designers professionalize their design work The company needs to apply information technology in the design and production of samples such as the application of software programs for fashion design, which help to improve the efficiency of design work This efficiency is highly rated labor productivity, creating many designs and minimize errors when designing time 4.2.2 Solutions related to the environment, safety, goods origin, trade defense, ecommerce exploitation, etc Measures that businesses often apply to promote and promote their products: Participate in fairs and exhibitions; Advertising products and images through media such as newspapers, television, online; Sponsoring for social activities; Organize contests to learn about products and businesses; Promoting products and organizing product trials in public places or at home; Through the local distribution channel system to promote its products and images As the product business in the EU is mainly developed in a chain, chain penetration should be given due attention Businesses should have representative offices abroad, not just depending on diplomatic channels Enterprises should also regularly update information from export-supporting e-portals from the EU or Vietnam Ministry of Industry and Trade on foreign markets, the most popular currently being the Official Support Portal bilateral trade system "Export Help Desk" - where businesses can find complete information about the potential EU market 66 4.2.3 Group of solutions for human resources In the issue of using human resources, businesses need to pay attention to a very important issue that is labor productivity Labor productivity is a factor that directly affects the volume of goods created The higher the labor productivity, the greater the number of goods as well as the amount of work to be addressed Labor productivity depends on factors such as working time, labor qualifications, and labor tools The more labor time you have, the greater the volume of products you can produce, but the higher the level of labor is not likely to achieve this Because the level of labor must match the job position that the employee takes to be effective Therefore, businesses need to recruit human resources in accordance with the position they will take over Enterprises need to separate the job levels that require what level to recruit the right people and the right jobs Along with the recruitment policy, businesses need to have a policy of training and developing human resources Exporting companies in the world market need to develop training programs with contents on issues such as environment, cultural characteristics, language training, ways of doing business with foreigners out Training must be associated with the development of human resources to maintain and attract a team of skilled, experienced workers loyal to the business In addition, the company needs to have an attractive salary and bonus policies, good remuneration, and promotion opportunities for employees to attract and retain talents In this period, the garment industry had to compete not only in terms of quality and price but also from the online auction stage At present, the order of taking samples directly to the factory and signing the production is outdated and must be auctioned online For example, having a fashion company in France come up with a new design and invite online auctions A series of competitors from countries with a strong position in the world apparel industry will bid together, so they must have human resources to meet these requirements There must be experts who can calculate immediately in a short time, with such materials, what materials are needed, how long is the execution time and give a reasonable price so that they can win contracts great value Therefore, the most important stage for the garment industry in the coming time is to create high-quality human resources 4.2.4 Technical/technological solutions Technology development is carried out in many ways such as self-research and development, technology transfer, trade, gifting, etc However, enterprises should pay attention to the properties of technology such as computer technology the system, the organism, the specificity of the target, and the location, the information to develop the 67 technology appropriately, bring the highest efficiency for the enterprise And for the enterprise exporting to the world market For many business competitors, they need to evaluate their production technology and determine their position in the market to develop the technology suitable to their ability (ie the harmony of four elements of equipment, human skills, information, and organization) but meet a target market segment for output products Design and manufacture of competitive products in the domestic market and direct export 4.2.5 Solutions for production scale + Continue to promote FOB production methods To FOB, businesses have to invest heavily in developing the model The shift from the CMT production method to FOB and ODM requires businesses to be proactive in raw material sources However, the issue of raw materials is still a problem that has not been completely solved not only for the Company in particular but also the Vietnamese garment industry in general: In the short term, garment enterprises still have to rely on raw materials foreign raw materials, so to ensure the initiative with the source of raw materials requires businesses to have a close link with foreign material suppliers + Building up an available information network on raw material suppliers Enterprises need to have a reliable source for easy access to distributors capable of providing special materials and must ensure quality, delivery time It is necessary to have close links between businesses to enhance the position of each business in the relationship with suppliers In the long term, in order to better fulfill FOB and ODM orders, the Vietnamese garment industry must necessarily shift to the segment of raw material production On the one hand, it helps businesses to be fully active in raw materials and supplies, improve their competitive advantage, and on the other hand, help to increase the added value of Vietnam's garment industry + Enterprises need to prepare good financial capacity Stable financial resources are an important condition for purchasing and transporting raw materials Especially, in order to successfully implement FOB and ODM contracts, businesses need to upgrade their management skills to cope with risks that may occur during the performance of the contracts in order to ensure the prestige with the collectors buy worldwide + Enterprises need to recruit more managerial workers as well as direct production workers 68 These two parts must work together to create unity in the stages from planning to production Investing in factory equipment, input materials, so businesses can create an internal consistency to respond to market fluctuations in which the product is currently and will be present + Expanding production scale The scale of an enterprise's production is its ability to create a certain quantity of goods in conditions of limited capacity in terms of capital, human resources, and production technology Before wanting to boost exports, businesses must make the most of their production capacity to expand production scale, increase production to supply market demand 4.2.6 Financial solutions The company's own capital is limited, so the enterprise needs to mobilize external capital to boost its export activities External capital can be mobilized from banks, credit institutions at home and abroad, from funds or from people To mobilize external capital, businesses need to business effectively This is the basis for banks, credit institutions to assess the ability to repay the capital An effective business will create credibility for businesses, creating confidence for capital investors when lending capital to the company 4.3 Some recommendations for the State The Government should step up cooperation with ASEAN countries to determine the advantages of each step in order to increase the overall competitiveness in the face of China's export garment products and fight against each other's competition The linkage with ASEAN countries also creates favorable conditions for Vietnamese garments to be able to use the quotas of these unused countries to export to the EU market ASEAN cooperation can help avoid developing countries' price quotas or quotas The responsibility of the State plays an extremely important role for businesses, both as a bridge and great support, companies in the garment industry in particular and enterprises, in general, depend heavily on threads Town and direction of the State We can see that, in order to promote the formation and development of Vietnam's garment sector, the government needs to play a role in the following: - Developing raw material areas for the garment industry A disadvantage for Vietnam's garment industry is that there is no available material According to statistics, every year, Vietnam has to import 70% of textile materials to 69 produce exports Because of the large import, the price of products will be pushed up, compared to China, the cost of Vietnamese garments is about 20-30% higher than that of similar products of China This contributes to explain why Vietnamese enterprises still have to accept export processing as the main product, accounting for 80% of export turnover In addition, the import of large quantities of raw materials will make Vietnam's garment industry under pressure from foreign suppliers and have difficulty in executing large orders Producing raw materials and accessories is an important and high-valueadded stage, but this is the weakest stage of Vietnam's garment industry Therefore, to promote the development of Vietnam's garment industry, the government must have policies to attract investment (at home and abroad) in the production of raw materials and accessories to overcome the weakness in this stage The biggest obstacle in attracting investment in the current weaving and dyeing is the wastewater treatment problem Therefore, to solve this problem, the Government should plan and build a cluster of factories with good wastewater treatment systems to attract foreign investors, thereby improving production capacity at this stage This shortage of raw materials is partly due to the unbalanced development between the textile and garment industry Currently, only 30% of textile products meet the demand for export garments Compared with other countries in the region, the labor productivity of our country's textile industry is only 30-50% With the above situation, the State has a planning strategy to develop raw material areas in the country The textile and apparel industry needs to combine with agriculture to develop cotton-growing areas, increase the cotton-growing area in the Central Highlands, and expand to other regions Technical experts in well-known countries in the world such as the United States, Australia should be invited to consult and supervise the planting techniques to create high-quality cotton that meets the standards for production Export garments Developing the textile industry to catch up with the garment industry Need to create fiber products, fabrics eligible for export garments, or textiles In order to so, the State needs to have a specific plan on the development of silk materials for the textile industry, with preferential policies and technical support for this region And in order to ensure the output for domestically produced raw materials, the state needs to encourage garment and textile manufacturing enterprises to increase the localization rate through preferential policies on tariffs If still relying on foreign raw materials, garment businesses in Vietnam will face some of the following risks: time and quality risks in the process of transportation, risks about the time when finding replacement materials in the event of a product failure resulting in a contractual delivery effect The construction and development of raw materials for Vietnam's garment industry requires a huge investment in capital and technology, especially in the ability to manage efficiently In order to solve these problems well, the 70 Government needs policies to attract foreign investors to take advantage of FDI in the development of the garment industry In order to attract FDI to the garment industry, Vietnam must have an appropriate incentive policy along with a properly and closely structured market liberalization process, ensuring fair competition among the type of business - Technological development Technology development is an important step to implement the acceleration strategy of Vietnam's textile and garment industry until 2020 Technology development helps to improve productivity and product quality In fact, Vietnam mainly receives technology transfers, sometimes importing outdated technologies from the 1970s Technology limitations have affected the productivity and quality of textile products Therefore, the state should take measures to develop technology for the garment industry Immediately, it is still developing technology through the path of technology transfer However, the state needs to develop the activity of technology evaluation division to help businesses in the technology evaluation stage From the state's perspective, technology evaluation will have a broader vision more general Technology evaluation must determine which technology is modern and suitable to the country's production level, avoiding the import of outdated technology or too modern technology that cannot be used In the long term, the state needs to develop technology research and development centers, encourage textile enterprises to research and develop their own technologies in order to improve the competitive advantage of garment products Vietnam The government should allow promoting the import of technology from the EU Especially in the sewing industry, machinery plays an important role in the quality of products created On the other hand, if we increase the import of EU technology, it will balance the balance of payments because so far in trade with the EU, Vietnam is considered a trade surplus to this market - Construction of Vietnam's garment industry cluster Analyzing the success models of countries with developed garment industries, we find that to overcome the current weaknesses of Vietnam's garment industry, it is the lack of uniform development among segments in the whole supply chain The establishment and development of garment industry clusters in Vietnam will help boost the productivity and efficiency of businesses through access to services and raw materials, speed up, and reduce transaction costs between businesses Karma; increase competition among businesses, thereby promoting quality improvement In addition, the cluster model will help businesses access information easily, thereby promoting trade and innovation in businesses 71 - Training and developing human resources Human resources for Vietnam's garment industry are weak and lack both highly qualified labor and direct production workers With a highly qualified workforce, the textile and garment industry lacks highly qualified professional designers who are able to create models suitable to consumers' needs; good managerial staff even lacking US market knowledgeable staff With the direct labor force, according to the evaluation of foreign experts, the ability to use equipment of Vietnamese garment workers is only 70%, while in the countries in the region, it is 90%; Invest in universities such as Industrial Fine Arts University, Polytechnic University or Architecture University to develop fashion design department; Encourage students to major in fashion design; Organize fashion shows and fashion contests to create conditions for designers to try and assert themselves; Create conditions for students to study economics schools that have contact with reality to practice practical experience while still a student As for the direct labor force, the state needs to invest in training schools for garment workers in order to standardize operations and thereby improve labor productivity - Help businesses in market research, promotion, and product promotion The State must ensure a favorable business environment to promote competition, cooperation, and spillover effects among enterprises Basically, Vietnam's garment industry has a long history, the market size is relatively large and market mechanisms have been basically formed State support for businesses in this work is reflected in trade promotion: The Ministry of Trade should strengthen the organization or contact for textile enterprises to participate in textile trade fairs apparel, consumer goods fairs in the US and support businesses costs to participate in fairs; The Vietnamese deal in the United States is responsible for providing general information about the US market such as size, growth rate, consumer trends, purchasing power of textiles and garments and competitors' information or more important for textile exporters is information about US importers; Government agencies will act as a bridge for Vietnam's textile and apparel export enterprises and US importers wishing to import Vietnamese textiles and garments This cohesion will help Vietnamese textile and garment exporting enterprises to reduce the cost of finding partners and obtain reliable information on the import demand of US importers; Advise entrepreneurs on the most effective way to investigate information; Helping exporters in finding reliable sources of information from news service providers With the help of the government, garment and textile exporting enterprises will be greatly facilitated in the process of conducting market expansion research, promoting and promoting products; help businesses reduce financial costs and shorten the time, take advantage of business opportunities Supporting domestic textile enterprises to explore 72 the market, improve the operational efficiency of trade promotion organizations With the EU market, Vietnam will be able to better use industrial quotas (30% of total quotas) by approaching customers directly, avoiding industrial quotas at the end of the year as well as better use of the added quotas when processing pure exports, which are currently not in good use - Preferential policies on tariffs Tariffs will affect commodity prices and the competitiveness of products in the market To help businesses increase their competitiveness, the government needs preferential tax policies Tax reduction is the measure that companies most expect in tax policy The garment industry has to import 70% of raw materials to produce its products, so the government should reduce or exempt import taxes for the main raw materials such as cotton, cloth, and fiber to help businesses reduce production costs In addition, the state also needs to reduce VAT and export taxes to help lower production costs The State must provide documents to guide businesses on the implementation of tax laws or notify businesses when there is a change; Completing tax regulations to help businesses easily declare and pay taxes In addition to the above policies, the government needs to reform Customs procedures in the direction of simplifying to save time for businesses when export Support businesses by setting up support funds for businesses exporting textiles to the US market Or update information about US laws related to textile imports into the United States Establish a transparent quota management regime to avoid illegal purchase and sale of quotas, plan early allocation of quotas to help enterprises have a direction when producing exports to this market, reducing Quota fees to help businesses reduce costs further Supporting businesses in capital through the banking system Effectively use export support so that businesses can borrow at low-interest rates, solve difficulties in working capital and investment in equipment innovation, and successful application of scientific achievements Studying high technology to create quality garment products to create momentum for the development of Vietnam's garment industry - Law on investment-related regulations To implement EVFTA and other agreements directly impacting must aim to improve the convenience for investors Thereby, it is necessary to review and review closely the provisions on investment and business conditions according to the provisions of the Investment Law; promote the dissemination, guidance, and removal of difficulties and obstacles for enterprises, investors and state agencies to ensure the full and compliant implementation of the Law on Investment and the Law Enterprise; (ii) Develop supporting policies for small and medium enterprises Assist businesses in penetrating 73 and expanding new markets through channels of economic cooperation, trade and investment promotion, including supporting and solving difficult problems arising in export markets; Harmonize the legal framework for business, irrespective of the form of business ownership In the immediate future, it is necessary to assess the effectiveness of changing the definition of SOEs to make necessary and timely amendments; Reform administrative procedures in the field of tax, customs, import, and export The role of the Government in supporting businesses to shift production from CMT to FOB and ODM can be shown as follows: Facilitating enterprises to access preferential credit sources with interest reasonable interest Support and coordinate with enterprises in training human resources in the garment industry to improve the capacity of technical and managerial teams Support the development of upstream stages in the value chain so that businesses have easier access to raw materials for production through the policy of developing well the garment industry cluster Conclusion In a market economy and especially in the era of international economic integration, Vietnam has signed many important trade agreements, especially the Vietnam-Europe Free Trade Agreement, which has opened many opportunities and challenges, with many of the commitments to the EU that Vietnam must make The EU is a major economic center of the world, a market with great potential for high-end consumer goods needs, with a high level of science - technology - management and uniform customs The trade relations between Vietnam and Europe over the past few years have witnessed significant developments and strengthened in this 21st century The EU is developing in a stronger and more open trend, this will be a big market for goods circulation, opening up prospects for Vietnam's exports, especially garments The EU market opens up opportunities for Vietnam's export garment industry to grow, the garment quotas are always increasing and is also a big challenge for Vietnam's export garment industry when entering the EU market The Government of Vietnam, as well as Vietnam's garment enterprises, must make changes in management methods as well as in designing, creating new trends, diversifying garment products to suit Western culture, building trust among customers as well as importers in the EU market to gradually establish a Union between manufacturers and importers The Vietnamese side will supply the goods, while EU importers will be responsible for garment consumption Vietnamese garment exporting companies can contact with overseas Vietnamese living in EU member countries to learn more about the market as well as customs, catch the trend then design products suitable to customer tastes 74 In short, exporting garments to the EU market is a hot topic and poses to exporters how the market will accept their products Improving reputation in the market and the ultimate goal is to increase sales of businesses as well as gain a lot of profits for their businesses With the advantage of being a country with cheap labor and a tradition in garment production, in the future, Vietnam has the prospect of expanding the garment industry not only in the domestic market but also to export to other large markets such as the EU, USA, Japan However, the competition with other competitors is very fierce not only in the world market but also in the domestic market, if Vietnamese garment enterprises not have With solid strategies and supportive policies of the Government, Vietnam's domestic garment market has also been penetrated by and rivals such as China, Thailand, Indonesia and encroached on market share Thus, in the future, the opportunity for Vietnam's garment industry to export to the EU market will be very large, although it will no longer be subject to quotas as before and have a fair competition with other competitors when exporting In this market, the competitiveness of Vietnam's garment industry is still not high Therefore, Vietnam's garment industry needs more efforts in the future In order to develop Vietnam's domestic and foreign garment industry in the current conditions, Vietnam's garment industry needs to implement synchronous solutions from industry development, solutions to improve enterprises' competitiveness, marketing solutions, proactive raw materials, human resources, science, and technology solutions to product design At the same time, promoting promotion and trade cooperation with potential markets 75 ... chosen the topic "Solutions to promote export of garments of X20 Joint Stock Company to the European market in the context of the implementation of the Vietnam -European Union Free Trade Agreement (EV- FTA... this agreement Chapter 3: Actual situation of exporting garments of X20 Joint Stock Company to the European market 3.1 Overview of X20 Joint Stock Company The legal name of the Company in Vietnamese... is "Joint Stock Company X20" ; The legally registered name of the Company in English is "X20 JOINT STOCK COMPANY" ; The transaction name (abbreviated) of the Company is "GATEXCO 20" 38 The Company' s