Once the Trans-Pacific Partnership (TPP) agreement is realised, Vietnam’s textile and garment sector will gain benefits as the agreement is expected to bring the export tax rate for garments down to zero percent.

According to Executive Director of the Hanoi-based Garment 10 Corporation Than Duc Viet, his company’s products exported to the US are currently subject to a 20 percent tariff, but the rate is expected to drop to 0-5 percent depending on the kinds of products after the TPP is signed.

Thus, in general, Vietnamese exports to foreign markets such as the US will have better competitive pricing, he said, adding that Japan , which just joined TPP negotiations, and the US are the two largest markets of Garment 10 Corporation, accounting for 15 percent and 40 percent of its total export turnover respectively.

Besides, the TPP’s regulations on the origin of goods will encourage enterprises to invest in producing materials such as fibre to supply for domestic garment businesses, thus making it easier for garment makers to specify the origin of products to be eligible for tax incentives.

Viet forecast that following the signing of the TPP, many foreign garment makers will invest in Vietnam in order to take advantage of the preferential tax rates. Through cooperation and joint venture with foreign partners, local enterprises will also benefit from their strong financial capacity and advanced technology.

The director said the situation in the first half of the year had improved from 2012 for the textile and garment sector with more orders. He said his company saw its turnover go up by 10 percent from the same period last year.-VNA