VietNamNet Bridge – Vietnam exports 7.6 billion dollars’ worth
of garments to the US. And with the current growth rate, the export turnover
would be 13 billion dollars by 2020. However, with the Trans – Pacific Partnership
agreement TPP, the figure would be as high as 22 billion dollars.
Le Quoc An, Senior Advisor to the
Vietnam Textile and Apparel Association (Vitas), was the person who gave the
figure, affirming that this is not an “illusion,” if Vietnam can grab the opportunities
to be brought by TPP.
The international textile and
garment trade fair VTG 2012 which took place in HCM City some days ago, has
been described as a miniature picture about the textile industry. The booths of
the enterprises from China, Taiwan and South Korea dominated the trade fair.
Meanwhile, the number of Vietnamese products was very modest.
According to the General
Department of Customs, by November 15, 2012, Vietnam had exported 15,687
billion dollars’ worth of garments and fibers. However, in order to make such
exports, it had to import 10.77 billion dollars’ worth of materials, including
six billion dollars’ worth of cloth imports.
Also according to the customs
agency, China has been the biggest supplier of fabric and materials to Vietnam
(3.5 billion dollars in the first 10 months of 2012), followed by South Korea
and Taiwan.
Investing in textile industry to prepare for TPP
An from Vinatas said that TPP
would bring more opportunities to Vietnam to export 9 billion dollars’ worth of
products to the US by 2020. However, he also said that if Vietnam still heavily
depends on the material imports from China, Taiwan and South Korean, it would
not be able to obtain the nine billion dollars.
The US, a partner in TPP, has put
forward the “yarn forward” principle, i.e. that in order to enjoy the
preferential tariff of zero percent, Vietnam’s exports must be made of the
fiber and materials made in Vietnam or the TPP countries.
Meanwhile, Vietnam has been
insisting that it would enjoy the zero export tariff if its products are made
of import cloth and materials. The 15th round of TPP negotiation is taking
place in New Zealand, while Vietnam and the US have not found a common voice on
the issue.
The yarn-forward principle which
is thought to be applied in TPP has prompted investors to inject their money in
the textile industry. The textile factories to be set up in the near future,
would make out the materials to be provided to Vietnamese garment producers who
would export their products to the US and enjoy the zero export tariff.
An said he personally has
received at least 10 invitation for cooperation from the companies from
Singapore, Hong Kong and China, who said they wanted to look for suitable
places to set up textile factories in Vietnam.
TPP is believed to bring not only
economic benefits, but social benefits as well. According to Vitas, in order to
generate one billion dollars’ worth of garment exports, Vietnam would need
100,000 workers. As such, if Vietnam can export 22 billion dollars’ worth of
products by 2020 as predicted, this means that millions of new jobs would be
created.
However, Le Quang Hung, President
of Garmex Saigon, said that everything would still depend on the capability of
Vietnamese enterprises. “If we continue doing the outsourcing for foreign
partners and cannot export products under FOB (free on board) mode, we would
not be able to take full advantage of the TPP,” he said.
He said Garmex Saigon has
negotiated with foreign importers and reached a consensus that the company
would use a certain proportion of fabric made of Vietnamese fiber, so that the
products can enjoy the zero export tariff in the future, when TPP takes
effects, instead of the current 17-35 percent.
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