The garment and textile sector was forecast to suffer the most from goods origin regulations under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), said Bùi Kim Thùy, the country representative for Vi?t Nam at the US-ASEAN Business Council.
The CPTPP, which took effect in Vi?t Nam earlier this week, is expected to bring huge opportunities and also challenges to Vi?t Nam. However, materials for the garment and textile sector may still prove a headache.
“Everyone said with the CPTPP, the textile and garment industry would benefit the most, but if there is no appropriate support, opportunities could turn into challenges,” said Tr??ng V?n C?m, vice chairman of the Vi?t Nam Textile and Apparel Association.
The country’s garment and textile sector claimed second position in the world in terms of export turnover with US$36.1 billion in 2018. However, Vi?t Nam had to import around 80 per cent of its materials for production. The heavy demand on imported material had become a serious problem for the industry, C?m said.
Currently, Vi?t Nam has to import up to 99 per cent of cotton, 70 per cent of fibre and 80 per cent of fabric from foreign countries. The biggest shortcoming, according to the vice chairman, is that only 10 per cent of fabric is imported from Japan and countries that are part of the CPTPP.
The biggest bottleneck is that Vi?t Nam has been unable to produce fabrics for export.
Nguy?n S?n, vice chairman of Vi?t Nam Cotton and Spinning Association, said in order to build supply chains for the textile and garment industries, South Korea and China had developed effective industrial park models.
Vi?t Nam is in the top three biggest exporters of garments and textiles in the world following China and India. The country has an abundant labour force and golden population period. The sector has attracted $17.5 billion in foreign direct investment so far.
C?m said to take advantage of the opportunities from the CPTPP, Vietnamese firms should gain a deeper understanding of the sector, their advantages and markets in the CPTPP.
In order to solve the bottleneck, strong enterprises must work together with local authorities. The Government needs to develop policies for the next 10 to 15 years to take advantage of this agreement.