EPA talks hang in balance

12 Jul '07

2 min read

Garment and textile manufacturers in the country have shown their disapproval of Japan's desire to impose origin regulations under the Economic Partnership Agreement negotiations which began in January this year.

According to the regulations, all garment and textile products imported from Vietnam will have to be manufactured from materials produced either by Vietnam or bought from Japan or any other ASEAN countries which have signed EPAs with Japan.

Though material imported from Vietnam will be exempt from tariffs according to the EPA, products of material imported from countries such as China, Taiwan and South Korea will carry a 9-10 percent duty upon entering Japanese market.

Textile plants in Vietnam are currently able to meet just over 20 percent of local cloth demand. The remainder is imported from mostly non-ASEAN countries.

Local garment manufacturers said if Vietnam accepts this regulation, they would face many hurdles. An official from the Dong Xuan Knitting Company, one of the first exporters to the Japanese market, said they will have to compromise on variety and quantity as material exported from China has both these advantages over material exported from ASEAN countries.

Vice-director of Ministry of Trade's Import-Export Department, Ho Quang Trung, said the next EPA talks between Vietnam and Japan to be held later this month could reach a deadlock if this issue is not resolved.

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