Japan should aim to reach a free-trade agreement with the European Union next year or risk undermining EU interest in a deal, the 28-nation bloc’s chief negotiator warned.
Mauro Petriccione said an EU-Japan FTA could be struck within months after two-and-a-half years of talks if Japanese Prime Minister Shinzo Abe commits to scrapping import duties on European foods and drinks, scaling back non-tariff barriers for cars and opening up public procurement in the railway industry. In exchange, the EU is prepared to eliminate its tariff on autos from Japan and ease access to Europe for Japanese executives.
“For us, 2016 is very possible, it’s very desirable from a European point of view,” Petriccione told reporters on Thursday in Brussels. “If we don’t make it in 2016, we’ll have to explain why and we can’t exclude a resurgence of the skepticism toward the possibility of an EU-Japan FTA that we had before we started.”
In the shadow of EU-U.S. commercial talks, Europe and Japan are seeking an accord to expand their more than 100 billion euros ($108 billion) in annual goods trade and over 40 billion euros in services transactions. Japan is the EU’s No. 2 trade partner in Asia, after China. A commercial deal between Brussels and Tokyo would follow European agreements with South Korea, Singapore, Vietnam and Canada and the Trans-Pacific Partnership among nations including Japan and the U.S.
15th Round
With the 15th round of EU-Japan trade talks due to take place in February, Petriccione said the moment has come for compromises needed for an agreement.
“We have explained our position to each other ad nauseam,” he said. “We know the Japanese position inside out and Japan knows our position inside out. It’s time that we move on and start to say ‘OK, what is the compromise?’”
The EU insists that Japan remove tariffs on European foods such as chocolate, pasta, tomato paste and cheese, according to Petriccione. The bloc would refrain from demanding duty-free access to the Japanese market for “sensitive” farm goods in Japan such as rice, beef and pork, he said.
“It is proving difficult and more difficult than we had envisaged,” Petriccione said. “We are very competitive in all sorts of processed agricultural products. We don’t really see why the very large majority of European exports, including the agricultural sector, are threatening Japanese interests. We can see a few commodities where there may be an issue.”
Japanese Pledges
The EU also wants firmer Japanese pledges to remove non-tariff barriers for European cars in exchange for phasing out the bloc’s 10 percent duty on autos from Japan. The European goal is to ensure that vehicle standards and administrative regulation in Japan don’t unduly impede market access, according to Petriccione.
“We need to have a guarantee that the reduction in costs that our producers will enjoy when they sell to the Japanese market is comparable to the reduction in costs that the tariff elimination will bring to Japanese producers when they sell in Europe,” he said. “We’re not against a speedy elimination if we can justify it.”
Regarding public procurement, Petriccione said Europe’s biggest gripe with Japan has been the country’s practice of subjecting the rail market to an “operational safety clause” that lacked transparency.
“Until recently, we were never even told how that clause operated,” he said. “For us, cleaning that up is essential.”
An initial accord with Japan on this point needs to be followed up with more Japanese concessions for the European railway-equipment industry.
“They will maintain a safeguard clause,” he said. “The question is: how do they apply it to a preferential partner who can offer high-quality, safe equipment?”
SEJONG, Dec. 16 (Yonhap) — The free trade pact between South Korea and Vietnam will go into effect on Dec. 20, and will help fuel trade and expand investment opportunities, the government said Wednesday.
According to the Ministry of Trade, Industry and Energy, Seoul and Hanoi agreed on the effective date through diplomatic channels, with both sides wanting the pact to come into force as soon as possible.
After starting negotiations in September 2012, the two sides formally signed the free trade agreement (FTA) on May 5, with South Korea’s National Assembly approving the trade agreement on Nov. 30.
“With the FTA to be placed within the year, companies from the two trading partners can benefit from more tariff cuts starting Jan. 1,” the ministry said.
It said that under the deal, tariffs would go down at the start of every new year, so 2016 will mark the “second year” of rate cuts.
The ministry in charge of trade and industry promotion said that with the FTA in place, it will become easier for local companies to do business in the Southeast Asian country.
Seoul agreed to open 94.7 percent of its market, while corresponding numbers for Hanoi will reach 92.4 percent.
“The FTA will also create a more stable business and investment environment,” it said.
This is important because Vietnam is South Korea’s third-largest export market after China and the United States. In the first 10 months of this year, outbound shipments to the country topped US$23.39 billion.
The ministry said that besides textiles and car parts, the bilateral FTA will open Vietnam up to South Korean consumer electronics and even cosmetics. The latter could provide more export opportunities for South Korea’s medium-size enterprises.
The pact will, moreover, allow greater access to Vietnam’s service sector.
The Ministry of Trade, Industry and Energy in Sejong City. (Yonhap file photo)
Ever since spinning and weaving were first mechanized in the 18th
century, the yarn and textile industries have been in technological and
geographical flux, spreading from one corner of the world to the other.
Flourishing businesses in textiles ushered in the industrial revolution
in countries as far apart as the United Kingdom, the United States and
China.
Today, these twin industries are expanding rapidly in Southeast Asia,
providing entrepreneurial and job opportunities alike, and spreading
prosperity to companies and countries who demonstrate that they can
compete successfully on the world market.
Envisioned a future and built a company
As a yarn trader in Vietnam in the 1990s, Dang Trieu Hoa ─ known to
many internationally as Jack Dang — saw Taiwanese and Chinese polyester
manufacturers triumph on international markets. “By the turn of the
century,” Dang says, “I realized that my native Vietnam could serve as a
natural new setting to support similar success stories.”
Determined that his story should be one of them, Dang established the
Century Synthetic Fiber Corporation (now a publically held company of
which he is CEO) to produce polyester filament for the budding
Vietnamese textile and garment industry. It was a good choice. This
specific product subsequently enjoyed the highest growth rate in the
business.
From his experience as a trader, Dang knew the business well—but not
the production technology. “We initially bought second-hand equipment
from a Taiwanese company,” he explains, “under the condition that the
seller would teach us everything we needed to know about operating their
machines.”
He and his staff proved to be quick learners. Within two years, the
Century team had mastered the fundamentals and began looking for
next-generation technological solutions. In order to meet skyrocketing
demand and win market share at the same time, Dang boldly decided to
double the company’s production of Draw Texture Yarn (DTY) to 9 600 tons
per year. He wasn’t going to be able to do that cost-efficiently with
yesterday’s technology—and so he made one of the most consequential
decisions of his career.
“We decided to buy brand-new equipment from Oerlikon Barmag,” he says
simply. “This was a make-or-break investment for us, but given Oerlikon
Barmag’s proven track-record for providing energy-saving, operationally
efficient machines — plus the company’s reputation for excellent
customer service — the decision wasn’t difficult.”
Oerlikon Barmag equipment brought Century to the next level.
Century wanted to produce more sophisticated products, each
characterized by reliably high quality. With cutting-edge equipment from
Oerlikon Barmag, backed by the supplier’s technical support and
production management expertise, Century was able to enhance both its
capacity and quality control at the same time.
The expansion proved successful, generating financial resources for
Century to invest in a Partially Oriented Yarn (POY) facility with an
annual capacity of 14 500 tons while increasing its DTY production
capacity to 15 000 tons by 2008.
Dang realized that by applying a backward integration strategy to POY
production, the company could further increase overall product quality
and cut production costs. After recurrent phases of expansion, Century
factories can now produce 37 000 tons of DTY and Fully Drawn Yarn (FDY)
every year.
Both as a supplier and a production management consultant, Oerlikon
Barmag has been partnering with Century for ten years. That relationship
continues to evolve today. Dang tells us that his company is now making
investments in production that will increase annual capacity to 60 000
tons by the first quarter of 2017.
According to Dang, Vietnam’s garment and textile sector is entering a
golden era with excellent, sustainable long-term growth potential. He
is quick to point out, however, “[that] with great opportunities come
great challenges. In order to remain competitive internationally, a
company must offer reliably high quality products at competitive prices,
and deliver excellent customer service year after year.”
Objectives like these can only be achieved, of course, if the company
has modern production facilities, a highly skilled and professional
workforce and modern management practices.
Oerlikon Barmag helps Century check off all the boxes here,
delivering state-of-the art equipment, contributing (albeit modestly) to
workforce training, and consulting on best practices as Century brings a
widely imitated and very capable enterprise resource planning (ERP)
system on-line.
This business management tool is a suite of integrated applications
that Century will be able to use to collect, store, manage and interpret
data from many of their business activities, including product
planning, cost management, manufacturing, marketing and sales, inventory
management, shipping and payment.
In addition, Century has recently implemented in its brand-new
factory a new version of the Oerlikon Barmag’s plant operation center
(POC), fully in line with Industry 4.0. Believing that this state-of-art
production management technology will help the Company to improve
production efficiency and quality, hence improving its client
satisfaction as well as the Company’s productivity, Jack decided that
the POC will be deployed company-wise (in all factories) next year.
Sticking to the essentials
“At Century,” says Dang, “our strategy focuses on the four
‘M’s—namely, manpower, machines, materials and methods. Selecting the
right equipment supplier is a crucial factor for success. With
state-of-the art equipment from Oerlikon Barmag, we make high quality
products, which meet even the most rigorous demands of our customers.
This equipment saves energy — a significant production cost — thus
helping Century to build up a reputable brand name as an environmentally
conscientious, high-quality yarn maker.”
Century has simple yet effective business and development strategies.
The company focuses on delivering uniform, high quality products, and
also on continuously creating new ones.
Oerlikon Barmag plays an important role in this process as the
company delivers the advanced machinery to Century that ensures optimal
quality, versatility and efficiency. Oerlikon also regularly sends its
experts to Century to provide after-sales service and deliver practical
technological solutions to assist Dang’s company in the development of
new products.
Gazing toward the horizon
“I believe that the demand for polyester filament will continue to
grow,” says Dang, “We will be able to meet that demand with a stable
supply and stay competitive if we continue to innovate in terms of
improving product functionality.”
Recent innovations in functionality have included such breakthroughs
as hollow, anti-UV, quick-dry, recycled and even flame-retardant yarns.
Most of Century’s customers are knitting and weaving companies that
specialize in sophisticated materials for products procured by
world-leading clothing, footwear and home textile brands. These brands
include Nike, Adidas, Puma, IKEA, Uniqlo and Reebok.
“Working with Oerlikon Barmag, we’re able to provide exactly what our
customers need to meet their customers’ demands,” explains CEO Dang
Trieu Hoa. “Oerlikon helps us by updating their machines on an on-going
basis in order to provide new solutions that make it possible for us to
produce high technical specification products, while saving energy at
the same time!” by Frederic Love
Oerlikon Barmag is one of two competence brands from Oerlikon’s
Manmade Fibers Segment, and a prominent supplier of textile technologies
globally. Oerlikon Barmag is the world market leader in the development
and production of spinning systems and ancillary equipment, including
texturing machines, for manmade fibers such as polyester, nylon and
polypropylene.
