In the context of the absence of the Trans-Pacific Partnership (TPP), US textile and garment companies are finding their own opportunities in the Vietnamese market.
Rush to Vietnam
In late October, the American Apparel and Footwear
Association (AAFA) and the American Chamber of Commerce in Vietnam (AmCham
Vietnam) organized a series of activities in Ho Chi Minh City, including
international conferences on product safety and compliance issues.
Within the framework of the program, Nate Herman, Senior
Vice President of Supply Chain at AAFA, shared unreasonable facts asking
stakeholders to sit down to find common ground. Specifically, in the first
eight months of this year, Vietnam's exports to the US market reached more than
30.16 billion US dollars, accounting for 1.99% of total revenue of goods import
of the country. However, at this moment, Vietnamese goods is subjected to over
$ 2.2 billion in taxes and ranked second in the top 15 of the highest import
tax rates in the United States.
Notably, some Vietnamese goods are taxed at over 30%,
textiles are taxed at an average of 17% ... This shows that products and goods
from Vietnam are losing its competitive advantage than the goods of other
countries and territories, because the tax is too high.
"The growth rate of exports from Vietnam to the United
States continues to outstrip its competitors, eventhough it does not benefit
from any preferential trades or free trade agreements," said Nate Herman.
Vietnam's textile and footwear products will continue to increase exports to
the US market, even without TTP.
According to the AAFA, garment imports into the United
States from Vietnam increased by 8.74 per cent, footwear increased by 11.83 per
cent in the last 12 months, and Vietnam was the second largest exporter to this
market, after China. Retailers and consumers in the United States see the
strengths of quality, price and delivery commitment of Vietnam. This is also
the reason that AAFA and US businesses come to Vietnam.
A month before the AAFA chain of operations, the American
Cotton Association has combined with the Vietnam Textile and Apparel
Association to hold the Cotton Day 2017 event and awarded certificates to 12
existing Vietnamese enterprises consumed cotton from the United States. These
activities aim to connect textile and garment enterprises in Vietnam with
partners, suppliers and experts in the cotton industry of the United States.
Opportunity to increase investment, expand operations
Ryan Cabrera Tuazon, Regional Manager of HanesBrands
Corporate (USA) said that after 10 years of presence in Vietnam, the total
investment of this group is about $55 million, with 3 factories in Thua Thien
Hue and Hung Yen. Production capacity of HanesBrands Vietnam currently accounts
for about 20% of the Group's total global production.
Although there is no TPP agreement, there are other
opportunities for Vietnam's textiles and footwear, such as the RCEP, EVFTA.
"Vietnam is determined to be our production base in
South East Asia, of which the factory in Hue is equipped with state-of-the-art
technology and equipment," said Ryan Cabrera Tuazon.
Jon Fee, senior consultant at Alston & Bird LLP, said
that despite the absence of TPP, there are other opportunities for Vietnamese
textiles and footwear. Accordingly, the programs that businesses should pay
attention to are: the Comprehensive Economic Partnership Agreement (RCEP), the
Vietnam-EU Free Trade Agreement (EVFTA), the BRI, the Vietnam-China cooperation
Strategy (Two Corridors and one Economic Belt).
According to experts, the export activities of Vietnam will
face difficulties due to the tightening of US regulations and standards on
safety of imported products in order to reduce the trade deficit. However,
there are still opportunities for American textile and garment enterprises in
Vietnam. With businesses operating in Vietnam, in the face of the complex and
global dispersion of garment and footwear supply chains, besides increasing
investment and expansion, product safety and compliance issues.
"An increasingly important measure of social compliance
as a practical protection tool against supply chain challenges becomes an
important aspect of supply chain management," said AAFA representative.
recommended the business.
Source: Investment Newspaper
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