Rule of origin puts Vietnamese garment industry in a spot

15 Sep '15

2 min read

The inking of a Trans-Pacific Partnership (TPP) is likely to have a clause on the origin of goods, presenting a challenge to Vietnam's textile and apparel industry. The point was brought up at the recently concluded Vietnam-Republic of Korea scientific seminar on garment technology, which was held in Ho Chi Minh City, as per Vietnamese media reports.

The rules of origin is an integral part of the trade agreement and expressing his concerns, Moon Byung-chul, commercial counsellor at the Republic of Korea Consulate General, said at the event, “Vietnam must follow TPP's 'yarn forward' rule of origin, which requires manufacturing textile and apparel products using only the US and other TPP countries' yarns and fabrics to qualify for the benefit of the agreement.”

Vietnam, even after being one of the world's largest garment exporters, still imports raw materials from countries like China and Korea. The lack of weaving, dyeing, and fibre manufacturing units impose challenges on Vietnam's garment sector.

Fearing the high risk of environmental pollution, many dyeing and weaving projects have failed to get licenses from the concerned Vietnamese government authorities in recent times.

Developing an infrastructure equipped with dyeing and weaving facilities and waste treatment plants can help Vietnam wade off the rule of origin concerns and attract foreign investment. (HO)

Fibre2fashion News Desk - India

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