‘RCEP will benefit Vietnam’s garment & textile industry’

June 19, 2013 - Vietnam

The proposed Asean framework for Regional Comprehensive Economic Partnership (RCEP) between the 10-nation Asean grouping and six other counties, viz., Australia, China, India, Japan, New Zealand and South Korea, will benefit Vietnam’s textile and garment industry, once the agreement comes into force, according to experts.
 
Speaking at a seminar on optimizing the use of free trade agreements (FTAs), organized by the Japan External Trade Organization (JETRO) in HCM City, JETRO Bangkok Research Centre researcher Kazunobu Hyakawa said the RCEP would be a single FTA that will generally standardize the rules of origin.
 
He said the RCEP would eliminate the need to check different tables while exporting to Japan, China or India, as all these countries would apply same tariffs for products, including textiles and apparels, originating from any of the Asean countries, thesaigontimes.vn reported.
 
This should help businesses reduce the cost of compliance, and both large and small Vietnamese enterprises must take advantage of preferential tariff treatment, he added.
 
Mr. Kohei Shiino, deputy director of JETRO Singapore, explained the huge benefits that will come to the Vietnamese textile and apparel industry, once the RCEP materializes.
 
Presently, in order to take preferential tariff benefit under Asean-Japan FTA, Vietnamese clothing exports to Japan have to be made from fabric originating either in Japan or Asean.
 
This does not much benefit the Vietnamese garment exports to Japan, as Vietnam imports over one-third of its raw materials from China. 
 
But, once the RCEP is implemented, even those Vietnamese garments that are made using Chinese fabric would enjoy preferential tariffs while exporting to Japan, as well as to other countries that are signatories to the RCEP, Mr. Shiino said.
 
The first meeting of RCEP working groups on trade in goods, services and investment took place in Brunei last month. The next round of negotiations will be held from September 23-27, 2013, in Australia.
 
The RCEP negotiations are likely to end in late 2015.
 
Last year, Vietnam exported US$ 17.2 billion worth of garment and textiles and the country aims to achieve US$ 18.8-19.2 billion in apparel and textile exports this year, according to Vietnam Textile and Garment Association (VITAS).