In order to take the complete benefit of Trans-pacific Partnership Pact (TPP), a free trade agreement involving 12 nations, the Vietnam National Textile and Garment Group (Vinatex) will increase the local content of its products to 60 per cent by 2018, according to Vietnam media reports.

Vinatex recently put into operation two yarn making factories and a dyeing-weaving plant, in order to get benefited from the “Yarn Forward Rule”. This rule requires the TPP member country to use a only yarn produced in any other TPP member country to receive duty-free access. Vinatex will also produce around 12,000 tonnes of knitted material a year. Apart from this six other garment making plants are also expected to be completed this year, said Vinatex chairman Tran Quang Nghi.

TPP will bring down the taxes by 100 per cent for Vietnam, as a result the Vietnamese textile and garment industry will get a boost in terms of volume and turnover. However, the actual benefit will take some time as the TPP needs to be approved by parliaments of all member countries before it can be implemented.

Meanwhile, Vinatex general director Le Tien Truong said that global demand for textiles and apparel will stay at around the same level this year as it was in 2015 since except for the US, major markets like Japan and Europe are showing low economic growth. He expects Vietnam’s textile and clothing sector to grow at around 12 per cent this year.

The moves of countries in the region to devaluate their domestic currencies has reduced the production cost in those countries compared to Vietnam’s, which might let the buyers to switch orders to other countries like Indonesia, Myanmar and China, said Nguyen Xuan Duong, general director of Hung Yen Garment Company (Hugaco). (NA)

Fibre2fashion News Desk – India

22/01/2016

Quote from: “http://www.fibre2fashion.com/news/apparel-news/vietnam-garment-sector-braces-for-tpp-177112-newsdetails.htm“