Vietnam will make the most of TPP, says Trade Minister

20 Nov '15
2 min read
Vu Huy Hoang/Courtesy: moit.gov.vn
Vu Huy Hoang/Courtesy: moit.gov.vn

Vietnam's Industry and Trade Vu Huy Hoang has said that the country will make the most of opportunities presented by the Trans-Pacific Partnership (TPP) trade deal, a leading Vietnamese newspaper has reported.

Hoang said apparel products originating in Vietnam would enjoy tariff incentives when exported to Pacific Rim countries. He made the statement while replying to a question by National Assembly (NA) deputy Nguyen Ngoc Hoa of Ho Chi Min City about opportunities and challenges for the apparel industry relating to the TPP at a question-and-answer session at the NA in Hanoi.

But those products must meet the yarn-forward rule, which means producers must use materials starting from yarn which are produced in Vietnam to enjoy low or zero tariffs.

Hoang said the US has agreed to offer tariff incentives for some types of Vietnamese apparel made from materials imported from non-TPP member states. He said 184 out of 186 apparel items will not be affected by the yarn-forward rule. “This means Vietnamese apparel will be given tax incentives even if the country is unable to produce yarn.”

But he conceded that the 184 products make up only 15 per cent of the TPP market while the proportion of the remaining two is a hefty 85 per cent. Therefore, a majority of apparel producers will have to abide by the rule.

“The TPP is a chance to enhance the domestic production capacity. If enterprises keep relying heavily on imported materials, they would be confined to the outsourcing job,” Hoang said.

The current localization rate of apparel products is 50 per cent, much higher than a decade ago. In the national development strategy for the textile-garment sector, the Government encourages more domestic and foreign investments in weaving and knitting facilities, the report said. (SH)

Fibre2Fashion News Desk – India

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