Interviews
Vietnamese garment exporters keen on TPP
28 Jan '12
2 min read
Vietnamese garment enterprises are putting high hopes on the Trans-Pacific Partnership (TPP), as they foresee chances of increasing their exports to the US market, once the deal is inked.
TPP would facilitate gradual reduction in tariffs on exports of several goods that Vietnam and other TPP member nation's ship to the US, before these are totally removed.
Such tariff abolishment would help the garment sector – Vietnam's biggest export earning sector – to raise its competitiveness in the US market, as compared to other countries.
Around 95 percent of Vietnamese exports would enjoy duty-free facility in the US, if the TPP materialises. However, the garment sector would benefit the most.
According to reports, some new issues have surfaced during the last round of negotiations for TPP as the US trade representative has sought application of the “yarn forward” principle.
Under the principle, preferential tariff benefits would be available to only those garment items for which yarn and post-yarn production processes like fabric, cutting and tailoring are undertaken in TPP member countries, and only the fibre can be procured from non-TPP member countries.
Experts say if such a principle is adhered to, it would not only prove detrimental to the Vietnamese garment exporters, but would even deprive the US investors in Vietnam from the benefits of the TPP, as they too only undertake cutting and tailoring process within the country.
They opine that altering or relaxing the “yarn forward” principle could largely open up the US market for Vietnamese exporters.
TPP would facilitate gradual reduction in tariffs on exports of several goods that Vietnam and other TPP member nation's ship to the US, before these are totally removed.
Such tariff abolishment would help the garment sector – Vietnam's biggest export earning sector – to raise its competitiveness in the US market, as compared to other countries.
Around 95 percent of Vietnamese exports would enjoy duty-free facility in the US, if the TPP materialises. However, the garment sector would benefit the most.
According to reports, some new issues have surfaced during the last round of negotiations for TPP as the US trade representative has sought application of the “yarn forward” principle.
Under the principle, preferential tariff benefits would be available to only those garment items for which yarn and post-yarn production processes like fabric, cutting and tailoring are undertaken in TPP member countries, and only the fibre can be procured from non-TPP member countries.
Experts say if such a principle is adhered to, it would not only prove detrimental to the Vietnamese garment exporters, but would even deprive the US investors in Vietnam from the benefits of the TPP, as they too only undertake cutting and tailoring process within the country.
They opine that altering or relaxing the “yarn forward” principle could largely open up the US market for Vietnamese exporters.
Fibre2fashion News Desk - India
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