What's the future for textiles & garments without the TPP?
Wednesday, March 22,2017AsemconnectVietnam - With the collapse of TPP, the textile & garment industry will have to revise its investment and development strategy.
Textiles & garments has been an important export item for many years. In 2005, textiles and garments made up 14.9% of export turnover. In 2016, the figure rose to 17.8%.
In 2005-2016, Vietnam was one of the countries pioneering in global economic integration. It did not skip any free trade agreement (FTA), meaning that Vietnam has exploited all possible FTAs, at least in the medium term.
However, analysts said that even if the agreement became realistic, TPP would not be a ‘magic wand’ that helps the industry skyrocket. With the ‘yard forward’ principle, Vietnam’s textile and garment exports would enjoy preferential tariffs if they use input materials sourced from TPP member countries.
A research work by Vanzetti & Pham in 2014 showed that Vietnam only imports 5.3% of input materials from TPP member countries. This means that if the figure cannot improve, only 5.3% of Vietnam’s textile & garment output would enjoy preferential tariffs under TPP.
Analysts have every reason to doubt Vietnam would not be able to get many benefits from TPP. In fact, Vietnam did not carry out any research work on the quantitative benefits it could expect from TPP.
Vietnamese businesses were only inspired by surveys by international organizations that Vietnam would most benefit from TPP.
It’s still unclear how the textile and industry would work out after TPP collapsed. When TPP was under negotiations, three scenarios for the industry were drawn up.
First, Vietnam would increase imports from TPP member countries. The solution was not feasible and it should not be discussed further as the US has left TPP. Second, Vietnam would rely on external resources, a solution easily implemented.
In 2014-2016 alone, US$2.563 billion worth of foreign direct investment (FDI) was poured into the textile & garment sector. However, this means that Vietnam’s supporting industries would depend on the foreign invested sector.
Third, Vietnam would rely on its internal strength. Establishing an inter-provincial cluster of textile & garment production centers has been suggested.
If the solution is implemented, the eastern part of the southern region, which now makes up 60% of total textile and garment export turnover, would be a good choice.
HCMC, the nucleus of the cluster, would focus on branding and designing, while other localities would be production centers.
This southeastern region makes up 50% of Vietnam’s most important indexes, including GDP, industrial production output and exports.
Source: vov.vn
Indian research intern: Vietnam’s clean energy transition accelerates
Nordic countries share green solutions for circular economy with Vietnam
Vietnam promotes negotiations of FTA with Mercosur
Vietnamese, Dutch localities step up cooperation
Vietnam joins Multilateral Convention to tackle tax evasion and avoidance
Vietnam, Mexico see ample room for trade cooperation: workshop
Hoa Binh province exports first batch of fresh sugarcane to US
Aviation firms ready to welcome Chinese tourists
Vietnam, South Africa explore cooperation potential
Mong Cai int’l border gate facilitates Vietnam’s exports to China
Vietnam’s trade with top 11 Asian markets is set to grow significantly
Foreign direct investment projects go green
Vietnam has dual opportunity from offshore wind power: Danish Ambassador
Mini Thailand Week kicks off in Quang Ninh
Plan on implementing Decision No. 327/QD-TTG dated March ...
Concretize viewpoints, objectives, tasks and solutions of the plan in accordance with practical conditions of the locality, associating ...Plan on implementing national environmental protection ...
Implementation plan of marine aquaculture development ...
Program on conservation and development of Vietnamese ...
Plan on improving quality of human resources to 2025 and ...
Efforts taken to turn culinary culture into national ...
The Vietnam Cuisine Culture Association (VCCA) is taking steps to implement a project to build and develop Vietnamese culinary culture ...Vietnamese cuisine making a name for itself with ...
Vietnam advance to next round of AFC U20 Women’s Asian Cup
Cultural tourism and traditional values promoted through ...