Thai Japan Trade Agreement Is Expected To Promote Garment Exports In Thailand

The chairman of two major business associations in Thailand predicted that with the grant of the "Thai Japan economic partnership agreement (JTEPA)" signed by Japan, Thailand's clothing exports will grow by 10% this (2008).

In addition, the textile and garment industry in Thailand is also looking forward to expanding the ASEAN market. However, it may be hampered by inadequate labour or lack of expertise in design and product development.

In 2005, after the lifting of restrictions on textile quotas among member states of the World Trade Organization (WTO), despite the numerous domestic problems in Thailand, including the 2006 military coup, many government industrial development plans failed to make progress, but they still occupied a place in the global textile and clothing trade.

Chairman of Thailand Garment Manufacturers Association Des Pathanasethpong and chairman of Thailand Textile Association Virat

Tandaechanurat has said that before the quota is abolished, the garment factories have the ability to contract products for different styles according to the quotas allocated, but it means that most of them can not specialize in research and planning of innovative technologies.

After the lifting of textile quotas, retailers and importers can choose sourcing sources and establish closer cooperation with suppliers.

Similarly, manufacturers can specialize in the study of specific types of products and increase their efficiency according to the equipment technology of factory innovation.

So far, Thailand's main R & D products are men's, women's underwear, professional sportswear and children's clothing.

In addition, Thailand textile enterprises also specialize in bra or high performance waterproof and breathable jackets. However, most of the garments made in the past have been limited to obtaining buyer orders.

Textile industry is an important industry in Thailand.

The textile and clothing industry in Thailand has a population of over 1 million, which accounts for about 20% of Thailand's manufacturing workers. 22.4% of the labour force is working in the capital intensive textile industry, of which 62860 people serve the knitting industry, while the other 77.6% (about 824500 people) serve the garment industry.

Thailand's textile and garment industry exports 8 billion 700 million US dollars, textile accounts for 48.8%, ready-made garments account for 51.2%, and garments made up of more than 57% of knitted garments.

The export performance has made Thailand the twelfth largest textile exporter in the world, supplying 1.4% of the world's textile trade, and the eleventh largest exporters of garments, with a market share of 1.5%.

The main export markets include the United States, the European Union, East Asia (including Japan) and the ASEAN (ASEAN) countries.

Although the textile industry in Thailand has developed maturing, it is a vertically integrated industry spanning fiber production to complete garment sewing. However, since most garment manufacturers implement the processing mode of incoming processing and provide cloth for customers, so far, basically, the operation does not depend entirely on their domestic textile industry.

Trade with Japan

JTEPA, which has been in force since November 1, 2007, is seen as an effective aid to Thailand's textile and garment industry.

It is really puzzling for the customers of Thailand garment industry not to make good use of the supply of their own fabric suppliers for the urgent need for customers to shorten the lead time. However, under the code of origin of JTEPA, Thailand made garments must use Thailand or Japanese woven fabrics, so that they can apply the preferential treatment of zero tariff to Japan.

In addition, we believe that JTEPA will help reduce Japan's dependence on Chinese products (last year, Japan's 90% ready-made garments were supplied by China) and provide a huge growth opportunity for Thailand's industry.

ASEAN trade agreement

The East Association trade agreement, which came into force in 2005, will also benefit from the textile and garment industries of Thailand. Among the 10 member countries of the association, only 2 textile exporting countries - Thailand and Indonesia - are sufficient to supply the needs of rapidly growing garment producing countries - Vietnam, Kampuchea and Laos.

Among the 2 cloth exporting countries, Thailand's textile industry is considered to be more competitive than Indonesia, with its geographical location closer to the market and less political problems.

Although Vietnam has actively developed and attracted foreign investment in its textile industry in order to be self-sufficient, the Thailand Textile Association has estimated that in the next five years, the output of textiles from Thailand to ASEAN countries will increase by 20%, while that of the ASEAN countries will reach US $20 billion.

The ASEAN has a population of 500 million, which has surpassed the European Union, and the production class has become more and more affluent. In the ASEAN countries, people seeking fashion clothes will gradually look for Bangkok, a thriving fashion city. As the fashion apparel industry in Thailand is growing, the chain reaction will inevitably shift from the OEM to the ODM production mode or the more value-added self-designed production mode.

The threat of China and India to Thailand is irrelevant because its textile and garment manufacturers will seek to increase domestic demand market.

Industrial textiles

In addition, Thailand textile industry has made breakthroughs in several potential areas in the development of industrial textiles.

At present, Thailand produces 2 million cars a year for export or domestic demand.

Under the JTEPA agreement, the two sides will work together to produce more environmentally-friendly energy-saving and environmentally-friendly vehicles. Thailand has discussed possible joint ventures with several major Japanese automakers, with the emphasis on the use of environmentally-friendly automotive interior textiles such as car seat covers, airbags, and inner tube structures.

Thailand textile industry is also highly interested in medical textiles and agronomical textiles, and the ASEAN countries are their largest potential consumer markets.

In view of the rise in international crude oil prices and the depletion of global oil reserves, the replacement of man-made fibres was first considered. As Thailand produces sugarcane, corn, bananas, pineapples and bamboo crops, its fibers can be used as textile products, so Thailand is the preferred place for alternative energy; Thailand industry has potential in this field, but it has not yet been put into action.

Disadvantages of Thailand's textile industry

Although Thailand has all the advantages mentioned above, its textile and garment industry still has several shortcomings.

The clothing industry is a labor-intensive industry, and the labor force does not impede the expansion of the industry in Thailand. Labor cost is also a major problem. In the countries where the garment industry has made the garment processing mode, the wages in Thailand are much higher than those in Kampuchea, Vietnam, Laos, Bangladesh, Pakistan and India. As a result, many Thailand enterprises expand overseas, mainly to neighboring ASEAN countries, such as