Illustrative image (Source: VNA) Hanoi (VNA) - The Comprehensive and Progressive Agreement forTrans-Pacific Partnership (CPTPP) agreement is expected to aidVietnam's exports, especially textiles and footwear industries, when it takeseffect, according to experts.
One of the key contents of the CPTPP is the removal of 95-98 percent of tarifflines as soon as the agreement enters into force. The remaining tariff lineswill be cut over the next seven years, moves predicted to aid the growth andexport turnover of the two industries.
Vietnam’s garment and textiles export turnoverhit 25.2 billion USD in the first 10 months of 2018, up 17.1 percent year-on-year.Meanwhile, footwear exports were valued at 13 billion USD, 9.7 percent higherthan in the same period last year.
The export turnover of garment and textiles recorded growth in key markets suchas the US, the EU, the Republic of Korea, China and member nations of theCPTPP.
According to the Vietnam Textile and Apparel Association (VITAS), theCPTPP will help Vietnam accelerate its growth and make the export market morebalanced. The zero-percent tariffs will help the country’s textile and garmentindustries expand market share in countries with high tax rates like Canada,New Zealand and Australia.
Vietnam’s export turnover of the industry is forecast to reach 35 billion USD in2018. The figure is expected to climb to 50 billion USD in 2025.
Experts, however, also pointed out difficulties facing the sector.
The CPTPP sets strict requirements on product origin, which is a big challengefor Vietnamese enterprises and the textile and garment and footwear sectors inparticular, as they are heavily dependent on material sources imported fromChina, India and other ASEAN countries.
Truong Van Cam, VicePresident of VITAS said the current source of materials for Vietnam’s textileand garment industry is limited.
The US, the EU and Japan are now the three largest export markets of Vietnam.
Vietnamese exporters havebeen advised to continue promoting the support industry, and ensure the originof raw materials for production.
For the footwear industry, the CPTPP is also an opportunity for exporters to expandtheir markets to Chile, Australia, New Zealand, Mexico and Canada and Japan.
Experts said Vietnamese exporters of footwear have great opportunities to sellproducts in Japan, one of the key markets for the sector.
If enterprises know how to make full use of terms from the CPTPP, growth inthis market is likely to increase, they stressed.
Vietnamese businesses will also have more opportunities in Canada, which will imposea zero import tariff on both leather shoes and handbags immediately.
However, to benefit from this agreement, footwear enterprises will have toovercome considerable challenges.
According to Nguyen Duc Thuan, Chairman of the Vietnam Leather and Footwear Association (Lefaso), businesses should explore regulationsrelated to customs procedures and logistics of member countries of the CPTPP,while improving the quality of their products.
The government should support enterprises by creating a fair playground andminimising administrative procedures to protect Vietnamese firms in thedomestic market, Thuan said.
Phi Ngoc Trinh, General Directorof the Ho Guom Garment Group, said his company has invested in equipment andbuilt more factories and production lines to meet quality standards offastidious markets.
Meanwhile, Vu Duc Giang, Chairman of the Board of Directors of Bao Minh TextileJSC, said all production lines of the firm use the most advanced equipmentsfrom famous global brands.
Each year, Bao Minh provides more than 35 million metres of high quality fabricfor the fashion brands.
The firm has contributed to increasing the supply of raw materials in thecountry, helping businesses reduce imports of raw materials. -VNA
VNA
