Vietnam Textile Raw Materials Are Too Dependent On Imports, Resulting In Huge Challenges.

April 27th reported that the Ministry of industry and trade of Vietnam considered that

The industry is Vietnam's accession to the p Pacific Partnership Agreement.

The core interest lies in Vietnam's textile industry.

Too much reliance on imports poses a huge challenge to TPP's origin and supply chain from the "yarn principle".

According to the report, TPP's "yarn based principle" requires Vietnam's textile industry to further develop, especially invest in developing yarn and cloth industry, so as to create opportunities for Vietnamese enterprises to participate in the supply chain of TPP members in depth.

But up to now, the domestic textile industry still needs 60% raw materials to be imported from China, and domestic products are mainly knitwear and low-end textiles.

Especially for twill weave fabric, towels and other high-end fabrics, 70 - 80% depends on imports.

At present, Vietnamese textiles still face higher tariffs on major export markets, including the United States (17.5%), Canada (17%), Mexico (30%) and Peru (17%).

Once the TPP comes into effect, import tariffs will fall sharply.

Among them, for the US market, 73.1% taxes will drop to 0% immediately, 19.7% will reduce 35 to 50%, and decrease to 0% in eleventh to 13 years.

For the Canadian market, Vietnam's export textiles will enjoy zero tariff treatment immediately or 3 years later.

For Mexico and Peru, Vietnam's textile tariffs will drop to 0% in sixteenth years.

But it is not easy to profit from it.

The investment in a dyeing and finishing plant is up to tens of millions of dollars, which makes Vietnam's domestic textile industry small and medium enterprises powerless. In addition, it also faces fierce competition from mainland China and Taiwan enterprises in China.

Reported that the Vietnamese Ministry of industry and trade believes that because Vietnamese enterprises are mainly engaged in processing or designated commodity production, can not control the use of raw materials.

At the same time, most of the enterprises in China are backward in production technology, old in style, and unable to satisfy the customers' requirements and lack of market competitiveness.

Therefore, some experts believe that to solve the problem of rules of origin of TPP, the domestic textile enterprises should be strengthened to cooperate with each other. Export enterprises will actively seek cooperation between raw and auxiliary production enterprises to minimize import, which can not only meet the requirements of origin, but also ensure price competitiveness.

However, it is reported that at present, the capacity of Vietnamese domestic enterprises to form a complete industrial chain of yarn dyeing and finishing is still insufficient, and most domestic enterprises concentrate on the lowest value added garment links.