Vietnam ’s garments and textiles exports to Japan will be subject to zero percent import duties from October 1, which has raised estimates of the years earnings to 1 billion USD, up 20 percent from last year.

The tax reduction came as part of the Vietnamese-Japanese Economic Partnership Agreement, which came into full effect the same day.

Statistics show that 80 percent of garments and textiles companies have managed to secure export contracts for the rest of this year, 40 percent of the contracts being signed with Japanese importers.

Pham Xuan Hong, Director of the Saigon 3 Textiles company, said that his firm is set to make 50 million USD from exports to Japan , a 10 percent rise from last year.

However, Nguyen Hong Trang, Director of the Son Kim company said there is unlikely to be a steep increase in Vietnamese exports to Japan because it has very high demands and strict requirements on craftsmanship and quality. These are “not easy obstacles to overcome,” she said.

The Vietnamese Textiles Association (Vitas) President, Le Quoc An, meanwhile urged enterprises to focus on building up confidence in their products and to strengthen their relationship with Japanese importers right from the beginning with small contracts paving the way for bigger ones.

According to Vitas, Japan is one of the three largest markets for Vietnam ’s garments and textiles. Many Vietnamese companies have won regular contracts to supply knitwear, ready-made suits, shirts and towels to Japanese trading companies, including the Dong Xuan Knitting Company, the Nha Be Garments Company, the Nam Dinh Textile Company and the Phong Phu Textiles Company.

The sector’s export turnover to Japan has steadily increased to 820 million USD in 2008, accounting for 9 percent of its total earnings.

Although the impacts of the global financial crisis dampened the worldwide demand, the sector’s exports to Japan in the first 8 months of this year hit 605 million USD or 15 percent higher than the corresponding period last year.

The increase is more significant as the country’s garments and textiles export turnover fell slightly to 5.9 billion USD and its overall exports to Japan dropped by more than 32 percent to 3.9 billion USD./.