Home / Knowledge / News / Apparel/Garments / EVFTA fabric origin rule a challenge for Vietnamese firms

EVFTA fabric origin rule a challenge for Vietnamese firms

04
Aug '20
Pic: Shutterstock
Pic: Shutterstock
Despite the European Union (EU)-Vietnam Free Trade Agreement (EVFTA), which came into force on August 1, being considered as a great opportunity for the Vietnamese textile and apparel industry, there are concerns that the origin criteria ‘from fabric onwards’ will make it difficult for domestic products to enjoy the benefits of the trade deal.

According to the commitments outlined in the EVFTA, among the key export items of the nation to the trading bloc, the EU will eliminate tariffs on 77.3 per cent of all textile and apparel exports from the country, while removing the remaining 22.7 per cent over the following seven years.

In addition to enjoying advantageous tax rates, the EVFTA also promises to offer domestic textile enterprises the chance to import high-quality machinery, whilst simultaneously having access to EU standard raw materials.

Many domestic businesses have invested methodically into workshops, machinery and technology to meet the technical standards set by importers.

Despite this, with an export scale of approximately $5 billion per year to the bloc, the issue of how to make the textile and apparel industry meet the origin criteria to qualify for tax reductions remains a challenging issue, according to Vietnamese media reports.

The textile industry has failed to be proactive in sourcing fabrics that qualify for exports to the EU.

Additionally, the purchase of domestic fabrics is subject to 10 per cent VAT, meaning that it is more expensive than imported fabrics, ultimately making the benefits of tariff reductions insufficient to offset the selling prices and to compete with items from other nations.

Nguyen Van Cam, vice chairman of Vietnam Textile and Apparel Association (VITAS), said that the rules of origin remain the most difficult issue for the textile and apparel industry when it comes to capitalising on the EVFTA.

Fibre2Fashion News Desk (DS)


Must ReadView All

Pic: Shutterstock

Retail | On 21st Sep 2021

US clothing stores sales up 0.1% MoM, 36.6% YoY in August: NRF

Retail sales in the US increased during August as consumer demand...

Pic: Shutterstock

Apparel/Garments | On 21st Sep 2021

Research paper urges Kenya to cultivate new export markets

To diversify its exports and markets, Kenya should endeavor to raise...

Pic: Shutterstock

Textiles | On 21st Sep 2021

Pakistan's textile & apparel exports rise 28.67% in July-Aug ’21

The value of textile and garment exports from Pakistan increased by...

Interviews View All

Textile Industry, Head honchos

Textile Industry
Head honchos

Occam's razor principle and purpose-driven innovations

Florian Heubrandner, Lenzing AG

Florian Heubrandner
Lenzing AG

Cannot see the world breaking away from cotton & polyester

Textile Industry, Head honchos

Textile Industry
Head honchos

Delay in adopting water sustainability both financially & environmentally...

Susan Bhaktul,

Susan Bhaktul

Established in 2000 as a liaison with the Government of India, Industree...

Richard Armitage,

Richard Armitage

Adaptive Control automates, controls and monitors machines, systems and...

Erwin Devloo,

Erwin Devloo

The Picanol Group is a diversified industrial group active worldwide in...

Daniel Kaye, RocketLife

Daniel Kaye
RocketLife

<div>RocketLife, an award-winning developer of breakthrough visual...

Giulio Cesareo, Directa Plus

Giulio Cesareo
Directa Plus

UK-based Directa Plus is one of the largest producers and suppliers...

Ian Russell, Pireta

Ian Russell
Pireta

UK-based Pireta has developed a unique free-form process to add durable,...

Abhishek Bajaj & Samiksha Bajaj, Samshek

Abhishek Bajaj & Samiksha Bajaj
Samshek

Samshek is a fashion forward tech brand which combines digital experience...

Shalini Sharma & Shweta Pundir Sharma, Six Yard Story

Shalini Sharma & Shweta Pundir Sharma
Six Yard Story

Six Yard Story is a premium artisanal brand with a focus to bring handloom ...

Sarah Denise Cordery, Sarah Denise Studio

Sarah Denise Cordery
Sarah Denise Studio

Manchester, England-based Sarah Denise Studio provides relevant fashion...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


September 2021

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.


Advanced Search