The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) has opened up new avenues of growth for Vietnam’s Garment and Textile industry, while the EU-Vietnam Free Trade Agreement (EVFTA), expected to be implemented this year, could give a further boost to exports.
But the big question is whether Vietnam is prepared to take advantage of the same?
As per media reports, in the first four months of this year, Vietnam’s textile and garment sector posted a total export revenue of US $ 11.43 billion (a year-on-year increase of 9.56 per cent), but majority of its textile and apparel exports were to the traditional markets. The statistics of the Vietnam Textile and Apparel Association (VITAS) also points towards the same. As per its figures, USA is the largest importer of Vietnamese garments and textiles (accounting for 39.6 per cent of total export turnover), followed by CPTPP members (over 17 per cent), EU (nearly 13 per cent) and the Republic of Korea (nearly 10 per cent), in the first four months of 2019.
As it would have been experts are not very happy; with many of them suggesting that Vietnam should prepare itself accordingly and go all out to reap the maximum benefits arising out of these pacts.
After four months of CPTPP taking effect, the country’s textile and garment exports to internal markets have not shown any signs of growth, observed Executive Director of Vietnam Textile and Garment Group (Vinatex) Cao Huu Hieu.
It may be mentioned here that CPTPP is currently valid for seven of the 11 member countries including Japan, Singapore, Canada, Mexico, Australia, New Zealand and Vietnam. In 2018, the export revenue of Vietnamese textile and apparel products to these countries reached around US $ 5.3 billion, including US $ 4 billion from Japan.
As per experts, among the CPTPP member countries, Canada and Australia are ideal markets for the Vietnamese textile and garment sector to boost its exports in the near future.
To ensure Vietnam is able to get the maximum benefit, Huu Hieu underlined that Vietnamese textile and apparel products must meet the strict yarn-forward rule, meaning they must be produced in Vietnam and other CPTPP countries, so that the country enjoys the tax incentives from CPTPP.
Now with the much-awaited EU-Vietnam Free Trade Agreement (EVFTA) expected to take shape anytime later this year, there’s more for the Vietnam’s garment and textile industry to look forward to. After all, once effective, Vietnam’s total export turnover to the EU market is expected to increase by around US $ 16 billion…Hope the industry is preparing its grounds to lap up the opportunities!