Today: 25/09/2020 07:26:44 (GMT+7)

Fabric production an issue for textile industry

Fabric production is a challenge for Vietnam's textile and garment industry when it comes to free trade agreements (FTAs) requirements on product origin.

The import value of fabric and sub-material for the textile and garment industry accounts for 40 per cent of garment export revenue. Of which, 70 per cent of imported fabric was for manufacturing export garments.

Fabric production, issue for textile industry, textile and garment industry, free trade agreements, import value, manufacturing export garments, long-term co-operation

Production at the VIT Garment Company.

Truong Van Cam, deputy chairman of the Vietnam Textile and Apparel Association (Vitas), said stronger links in the industry are needed.

Enterprises will have to solve difficulties in the development of the production chain, such as differences in terms of quantity, quality and price of products, for long-term co-operation, Cam said.

The association also proposed the Ministry of Industry and Trade (MoIT) complete a development strategy for Vietnam's textile and garment industry to submit to the Government for approval, he said.

In the past, many localities did not give investment licences for dyeing and textile projects due to fears they would cause environmental pollution but now, the global textile industry has dyeing technology to lessen pollution.

The Government should direct localities to focus on solving difficulties of the textile and garment enterprises so Vietnam could have enough supply of raw materials meeting origin requirements to enjoy tariff preferences in FTAs.

In addition, the research and development (R&D) activities of textile and apparel industry are limited. Therefore, the State needs more investment in R&D activities to create good conditions for domestic research institutes to develop new products and equipment, he added.

The Mekong-China Strategic Studies Programme (MCSS) report released in Hanoi early this week also pointed out that the domestic textile and garment industry lacks sufficient domestic supply of materials, especially fabric, so it will be difficult to take advantage of tariff cuts in FTAs.

Vietnam has signed 13 FTAs, including 12 FTAs that are effective and one FTA waiting for approval. The nation is negotiating three other FTAs.

The deals bring many advantages in competitiveness for the textile and apparel industry. For instance, tariff rates are between zero and 5 per cent for textile, garment and raw materials. Meanwhile, according to World Trade Organisation (WTO) regulations, the tariffs are 12 per cent for textile and raw materials and 25 per cent for garment products.

According to the CPTPP, 42.9 per cent of Vietnam’s garment exports to Canada will enjoy tariffs of zero in the first year and tariffs on the remaining 57.1 per cent will be removed in the fourth year if Vietnamese products meet regulations on the origin of yarn.

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Source: VNS

Fabric production, issue for textile industry, textile and garment industry, free trade agreements, import value, manufacturing export garments, long-term co-operation
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