Reorganizing supply chain
Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) has opened up more growth opportunities for Vietnam's textile and garment industry in markets with high purchasing power and import tariffs reduced according to committed schedule.
According to data from Vietnam Textile and Garment Association, Vietnam's textile and garment exports to CPTPP member countries increased from US$6.27 billion before the agreement came into effect to US$8.3 billion in 2025, a 33.3% increase.
However, according to Mr. Truong Van Cam, Vice President and General Secretary of Vietnam Textile and Garment Association, export growth does not mean that businesses have fully exploited the tariff benefits. Bottleneck lies in ability to meet rules of origin, especially the "from yarn onwards" requirement.
This is a significant challenge for an industry with a long-standing strength in garment manufacturing but still heavily dependent on imported fabrics and raw materials. In 2018, Vietnam imported approximately US$1.59 billion worth of raw materials and components from within the CPTPP bloc; by 2025, this figure is expected to remain around US$1.58-1.59 billion. “Internal supply within the bloc has hardly grown, while major global suppliers of raw materials and components are significantly concentrated in markets outside the CPTPP,” Mr. Truong Van Cam assessed.
In textile and garment production chain, Vietnam has relatively good yarn spinning capacity, but weaving, dyeing and finishing remain weak links. The industry currently produces over 4.2 million tonnes of yarn annually, of which about 2 million tonnes are exported; fabric production reaches approximately 3.2 billion m², with about 1 billion m² for export. These figures show that domestic production capacity has been established, but it is not yet sufficient to comprehensively meet diverse fabric needs in terms of type, function and quality of international brands. In particular, for technical goods, ski wear, or products with complex design requirements, finding suitable suppliers becomes even more difficult.
Besides limitations in production capacity, the business model also directly affects the ability to switch supply sources. Many Vietnamese businesses still mainly manufacture goods based on customer-provided materials and designs. In this model, brands often control or designate suppliers, making it difficult for garment businesses to independently decide which raw materials to use, even if new source might help meet CPTPP origin requirements.
Switching supply sources, creating a foundation for material self-sufficiency
Therefore, switching supply sources is not simply replacing a non-block supplier with a block supplier. Businesses also have to convince customers to approve new materials, check quality, recalculate costs and ensure delivery schedules.
Despite difficulties, textile and garment businesses are striving to optimize tariffs under CPTPP. TNG Investment and Trading Joint Stock Company is a prime example, a business that shifted its supply chain starting with specific changes in its purchasing and product development processes.
Before CPTPP came into effect, TNG selected suppliers primarily based on three traditional criteria: cost, quality, and delivery schedule. When "from yarn onward" rule of origin became a crucial condition for enjoying preferential treatment, the company had to add origin to its raw material selection criteria, while simultaneously reviewing and reclassifying its entire supplier portfolio.
Instead of simply sourcing raw materials at competitive prices at any given time, TNG prioritizes long-term cooperation with factories that meet origin requirements, strengthening connections with domestic fabric suppliers that meet standards of major brands and avoiding dependence on a few single sources.
Notably, the company incorporates origin requirements right from sample development and pricing stages. Order department collaborates with customers to determine availability of raw materials in advance, limiting situations where approved products fail to qualify for preferential tariffs during implementation.
“We compare difference between raw material price and preferential tariff rate when customers import from CPTPP countries”, said Mr. Tran Minh Hieu, General Director of TNG. He also noted that, with this approach, the company evaluates raw materials based on total cost of bringing goods to their destination, rather than just comparing initial purchase price. Tax savings can offset difference in raw material prices, especially for large-volume orders.
TNG also invests in origin data management. Each batch of raw materials entering warehouse is tagged with a QR code, linked to corresponding invoice, contract, documents and certificate of origin. Data from purchasing department, warehouse, to export is connected, allowing business to trace origin of each batch of raw materials and each order when customers request it or during inspections.
Based on TNG's experience, businesses can start by mapping supply sources, identifying origin and proportion of each type of raw material and then grouping them according to their substitutability. Those that can be immediately substituted should be prioritized for connection with domestic or regional suppliers. Those with limitations in technology, quality or variety require a testing and development roadmap. For raw materials without a viable supply source, businesses should consider investment cooperation options instead of trying to replace them at all costs.
At the industry level, to achieve self-sufficiency in raw materials, Mr. Truong Van Cam believes that fundamental issues in weaving, dyeing, and finishing fabrics must be addressed. Vietnam can attract manufacturers with strengths in technology and raw materials from China, Taiwan (China), and South Korea to form joint ventures, partnerships or invest in production in Vietnam.
Along with that, policy for developing supporting industries needs to focus on truly lacking links, providing capital, technology, human resources and environmental treatment infrastructure for textile and dyeing projects. Without addressing environmental requirements and green production, expanding textile and dyeing capacity will struggle to meet increasingly high standards of export market.

Source: Vitic/ congthuong.vn