Without TPP, Vietnam’s textile industry still has a competitive advantage
The Vietnam Textile Association stated that the export market of Vietnam’s textile and apparel industry faces many challenges, but there are also some “scoring points” that create opportunities for Vietnam’s textile and apparel exports. He also emphasized that regardless of whether the TPP is ultimately passed, Vietnamese textile and apparel manufacturers need to carefully formulate future business directions.
1. Uncertainty in the US market. The United States is Vietnam’s largest export market for textiles and clothing, accounting for 40% of total exports. The Vietnam Textile Association stated that due to the uncertainty of the TPP, companies need to re-plan their development strategies to cope with the uncertainty of the US market: (1) The TPP still exists, but the implementation time and content have been adjusted, and access conditions may be increased. This will lead to a 50% reduction in the expectation of profit from the TPP; (2) Without the TPP, Vietnam’s textile and apparel exports to the United States can only comply with current WTO regulations, and exports will depend on the economic development of the United States; (3) Without the TPP , the new U.S. government may impose anti-dumping duties on textiles imported from Asian countries, including Vietnam, which will sharply reduce Vietnam’s textile exports to the United States. Based on the above three points, the Vietnam Textile Association reminds manufacturing companies to carefully plan their business directions.
2. Advantages in other export markets. Of course, the Vietnam Textile Association emphasized that in addition to TPP, Vietnam has many other opportunities.
(1) Vietnam-EU Free Trade Agreement. As the second largest export market for Vietnam’s textile industry, the EU still has great potential. Especially after the signing of the Vietnam-EU Free Trade Agreement, it will promote the further expansion of Vietnam’s textile exports to this market. According to statistics from the French Industrial Representative Office in Vietnam, from 2007 to 2015, Vietnam was one of the three largest textile exporters in Asia to the EU (the other two countries are Cambodia and Bangladesh), with annual export value increasing by 25%, equivalent to US$3 billion. /Year. The Vietnam Textile Association stated that cooperation with the EU market will help Vietnamese textile companies improve their design capabilities, production management skills and labor productivity, improve production forms, and shift from pure processing to independent raw material processing (FOB) and independent design and production (ODM). ), independent production and distribution (OBM), thereby improving the initiative of manufacturing enterprises and the added output value of products.
(2) Vietnam-Eurasian Economic Union Free Trade Agreement. In addition to the EU market, Vietnamese textile manufacturers also have many opportunities in emerging markets, especially the Russian market. Vietnam is the first country to sign a free trade agreement with the Eurasian Economic Union, which provides Vietnamese textiles with an absolute competitive advantage in entering the Russian market and other Eurasian Economic Union markets. It is worth mentioning that the Russian market has the most relaxed requirements for rules of origin, and only requires processing in Vietnam. In addition, the Free Trade Agreement between Vietnam and the Eurasian Economic Union also abolished the previous unreasonable regulations on textile products charging tariffs based on weight.
(3) The emerging Myanmar market. Myanmar has also been rated as a market with great potential for Vietnam’s textile exports. In October 2016, the United States announced the lifting of sanctions against Myanmar, preferential tax cuts for less developed countries, and the establishment of the ASEAN Economic Community. These factors created favorable conditions for Vietnam’s textile exports to expand to Myanmar. In addition to exporting textile products and raw materials, Vietnam can also invest and build factories in Myanmar, or establish joint factories with Myanmar companies, or even invest in the establishment of fashion design centers to take advantage of Myanmar’s cheap labor force.
Although Vietnam’s textile industry still faces many difficulties, the Vietnam Textile Association believes that Vietnam’s textile industry is still competitive in terms of labor force and production levels. In addition, political stability and increasingly improved trade facilitation policies, especially the wave of foreign investment to take advantage of free trade agreements such as the TPP and the Vietnam-EU Free Trade Agreement, have contributed to increasing the production scale and level of cloth, yarn and raw and auxiliary materials in Vietnam’s textile industry. Make a positive contribution. Without TPP, Vietnam’s textile industry still has a competitive advantage
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