TOKYO — Asian prices of synthetic fibers used in apparel and industrial materials have dropped for eight months in a row due to cheaper raw materials and an oversupply in China.

     The Asian spot price of long polyester filament recently stood at $1.03 a kilogram, 3.7% cheaper than a month earlier and the lowest in about 14 years. Prices of polyester staple, a shorter fiber than filament, fell 3.6% to 81 cents per kilogram, the cheapest since February 2003.

     One reason for the decline is that purified terephthalic acid, the main feedstock for polyester, has followed crude oil prices lower and now costs around $560 a ton — down 30% from the recent high in May 2015.

     Another is that in China, which produces more than 70% of the world’s synthetic fibers, polyester supplies have exceeded demand by 40%. The soft market will likely persist as long as the large oversupply does. Demand has been weak since the Lunar New Year but some say will start picking up in the latter part of March as apparel producers begin making fall and winter products.

Nikkei Asian Review

05/03/2016

Quote from: “http://asia.nikkei.com/Markets/Commodities/Synthetic-fiber-prices-fall-for-eighth-straight-month“

• (VOVworld) – The Korean-Vietnam FTA Support Center opened in HCM city on Friday. Vice President of the Korea Trade-Investment Promotion Agency (KOTRA) Roh Inho said free trade agreements help attract the investment of enterprises from the Republic of Korea (RoK) to Vietnam’s garment market.

  He said there is great potential for Vietnam to boost exports to the RoK, especially its key goods such as textiles, agricultural and aquatic products.  He noted that his country has committed to opening its market to Vietnam’s tropical fruits and removing tariffs on apparel. On the occasion, KOTRA and the HCM City city High-Tech Zone, signed an agreement aiming to enhance information exchange to foster export-import activities. 

  VOV World

  05/03/2016

  Quote from: “http://vovworld.vn/en-US/News/Korean-firms-interested-in-Vietnams-garment-and-textile-sector/415700.vov“

• Employees work at an Opal International garment factory in Yangon. (Photo by Simon Roughneen)

  HANOI   Asian garment manufacturers are signaling concern about disproportionate benefits for Vietnam over regional rivals in the textile sector as a result of its major trade deals, including the U.S.-led Trans-Pacific Partnership and a free trade agreement with the European Union.

       Vietnam is already the world’s fourth-biggest garment exporter, but will gain new preferential access to markets among the 11 other countries that have signed the TPP as well as the 28 EU member countries under the EU-Vietnam FTA. These are lucrative markets for Asia’s garment exporters who supply apparel to leading Western brands.

       The World Bank estimates that the TPP deal alone could see Vietnam’s exports — from clothing and footwear to coffee and seafood — increase by 30% and boost the country’s economic growth by 10% by 2030.

       The TPP needs to be ratified by the U.S. and several other countries, delaying implementation until at least 2017, while under the EU-Vietnam FTA, it will take seven years before duties on Vietnam’s garment exports there are completely eliminated.

       Even so, key regional apparel producers such as Cambodia and Myanmar are already alarmed that the trade pacts could help Vietnam undercut their vital garment industries. China and Bangladesh, the world’s two biggest garment exporters, are also likely to be affected, as are Indonesia and Pakistan, which have large but struggling textile and apparel sectors.

       “Vietnam’s trade deals will be a concern — not just for us, but the whole region,” Khine Khine Nwe, secretary-general of the Myanmar Garment Manufacturers Association, told the Nikkei Asian Review.

       According to MGMA, 38% of Myanmar’s apparel exports went to Japan in 2013, followed by South Korea at 31%. “Most of the factories in Myanmar produce for the Korean and Japanese markets,” said Jay Kim, managing director of garment maker Opal International in Yangon. He suggested that Vietnam’s favored trade status with the EU and the U.S. might not severely affect Myanmar for now. Japan is also a TPP signatory.

       Myanmar garment makers look to Europe as both a market and a source of investment, with garments a key part of the country’s plans to become a manufacturing economy.

       The EU cut duties on Myanmar’s exports to Europe in 2013 as part of a market access program for less developed countries. Around 20% of Myanmar’s garment exports now go to the EU, a proportion that is likely to grow, following similar trends in Cambodia, which saw its exports to the EU increase from 28% of its total garment exports in 2011 to 42% in 2014 under the same program.

       But the EU will gradually reduce its duties, currently 11.7%, on garments from Vietnam, where labor productivity is higher than in Cambodia.

   Kim said that 90% of Opal’s exports go to South Korea, but the company, which employs 5,000 people in three factories in Yangon, hopes to attract orders from Europe and the U.S.

       “Last year, U.S. buyers surveyed the Myanmar market, but they are waiting. Maybe after April they will start,” Kim said, referring to when the incoming government led by Aung San Suu Kyi will take charge.

       Myanmar could still face a challenge from Vietnam, which stands to at least double exports to the U.S. once the TPP takes effect, according to industry officials.

  COST ASSESSMENT   Indonesia, which sends half of its textile and garment exports to the U.S. and the EU, is also under threat. With high energy costs reducing the country’s competitiveness, the government cut nighttime electricity tariffs last October to reduce manufacturer overheads.

       “The main challenges are the cost of electricity is too high,” said Ade Sudrajat, chairman of the Indonesian Textiles Association. “The second thing is market access to the EU and the U.S. If we can meet these two challenges then growth can be in double digits.”

       But the challenge posed by regional rivals Malaysia and Vietnam joining the TPP has prompted concerns in Jakarta. Despite the fact that Indonesia’s economy is four times the size of Vietnam’s, Vietnam’s exports to the EU stood at $22.2 billion in 2014, compared with Indonesia’s $14.4 billion.

  “MAJOR THREAT”   Most exposed of all could be Cambodia, where the garment sector is a main pillar of the country’s small economy. According to the International Labor Organization, the industry employs more than 700,000 workers and accounted for $5.3 billion — roughly 80% — of Cambodia’s total export revenue in 2014.

       Ken Loo, secretary-general of the Garment Manufacturers Association in Cambodia, said the country’s garment sector had already lost U.S. market share to Vietnam due to the latter’s lower labor costs and higher productivity. “If we can’t compete when we are on an equal footing, when the TPP comes … how can we compete then? The short answer is: We are definitely concerned,” he said.

       Faruque Hassan, senior vice president of the Bangladesh Garment Manufacturers and Exporters Association, told the NAR that “access to TPP for Vietnam is certainly a concern for apparel exporting countries, especially for Bangladesh.” He noted that Bangladesh will continue to face average duties of 16% on garment exports to the U.S. while Vietnam’s duties will be eliminated.

       “Vietnam is an emerging market for garments and has become a major threat, particularly to Pakistan’s value-added textile sector,” the Pakistan Readymade Garment Manufacturers and Exporters Association said in a statement. “After it entered into an FTA with the EU, Vietnam is already exporting $23 billion [worth of] garments against Pakistan’s meager $5 billion textile value-added goods.”

       But the TPP also means the authoritarian Vietnamese government will have to allow trade unions to operate and give more rights to factory workers.

       Paul Huynh, a director at KPMG Vietnam, said the trade deals “will have a tremendous impact for employees with opportunities to enhance labor standards to meet international best practice, as well as reforms around labor standards.”

       If Vietnam lives up to these commitments, it could also benefit from a better reputation than some of its regional rivals. Bangladesh’s reputation has been hurt by several fatal disasters at garment factories, while protests and strikes over working conditions and wages are common in Myanmar and Cambodia, which has led to recent rises in the minimum wage.

       Western brands keen to avoid being tainted by allegations of buying from sweatshops could opt to boost their presence in Vietnam. But Hanoi is likely to remain wary of allowing unfettered industrial action, given that union activity elsewhere, such as in Cambodia, has been linked to opposition political parties.

       The TPP has strict “rules of origin” stipulations that mean garments made in Vietnam from fabric sourced from countries not party to the deal will not be eligible for preferential access.

       Japanese, South Korean and Taiwanese companies are setting up operations in Vietnam to produce textiles and fabrics for local producers such as Vinatex, the country’s largest textile company.

       But for smaller companies, the costs associated with buying material from more expensive sources than China, a non-TPP member, could offset any gains they would enjoy from improved access to the U.S. market. “While [Vietnam] will have better preferential access in the U.S. market, its overall competitiveness will actually decline,” said Jayant Menon, an economist with the Asian Development Bank.

  SIMON ROUGHNEEN, Asia regional correspondent

  Sebastian Strangio in Phnom Penh and Harry Jacques in Jakarta contributed to this report.

  Nikkel Asian Review

  03/03/2016

  Quote from: “http://asia.nikkei.com/magazine/20160303-INDIA-S-STARTUPS-THE-GREAT-DISRUPTORS/Politics-Economy/Asia-s-garment-exporters-brace-for-a-TPP-empowered-Vietnam?page=2“

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  Vietnam’s textile and garment industry is confident of achieving its 2016 export target of $30 billion as most of the companies have enough orders already or are confident of achieving them to meet their revenue goals, according to Vietnamese media reports.

  Importers have already placed ample of orders and the textile and garment industry in Vietnam may have to look for more staff in order to complete them on time, according to Vietnam Textile and Apparel Association (VITAS).

  The textile and garment industry exported products worth $2 billion in January 2016, which is a rise of 5.8 per cent as compared to the corresponding period last year. Production increased by 12 per cent in the textile industry and by 11.2 per cent in the apparel industry in January.

  The implementation of the Trans-Pacific Partnership (TPP) will bring more export opportunities for the country. (MCJ)

  Fibre2Fashion News Desk – India

  26/02/2016

  Quote from: “http://www.fibre2fashion.com/news/textile-news/vietnam-confident-of-meeting-30bn-export-target-177865-newsdetails.htm“

• 
  

  

   

  Vietnam’s textile and garment industry is confident of achieving its 2016 export target of $30 billion as most of the companies have enough orders already or are confident of achieving them to meet their revenue goals, according to Vietnamese media reports.

  Importers have already placed ample of orders and the textile and garment industry in Vietnam may have to look for more staff in order to complete them on time, according to Vietnam Textile and Apparel Association (VITAS).

  The textile and garment industry exported products worth $2 billion in January 2016, which is a rise of 5.8 per cent as compared to the corresponding period last year. Production increased by 12 per cent in the textile industry and by 11.2 per cent in the apparel industry in January.

  The implementation of the Trans-Pacific Partnership (TPP) will bring more export opportunities for the country. (MCJ)

  Fibre2Fashion News Desk – India

  26/02/2016

  Quote from: “http://www.fibre2fashion.com/news/textile-news/vietnam-confident-of-meeting-30bn-export-target-177865-newsdetails.htm“

• Vietnam is set to gain a lot from the Trans-Pacific Partnership (TPP). And Bangladesh, China, Indonesia and Pakistan are worried. Bangladesh and China are the world’s number two and the top garment exporter respectively. Indonesia and Pakistan have large textile and apparel sectors.

  Vietnam is already the world’s fourth biggest garment exporter. The TPP deal could see Vietnam’s exports — from clothing and footwear to coffee and seafood — increase by 30 per cent and boost the country’s economic growth by 10 per cent by 2030.

  Access to TPP for Vietnam is certainly a concern for apparel exporting countries, especially for Bangladesh. Bangladesh will continue to face average duties of 16 per cent on garment exports to the US while Vietnam’s duties will be eliminated. However, TPP still needs to be ratified in the US and several other countries, delaying implementation at least until next year. The EU-Vietnam FTA will take seven years before duties on Vietnam’s garment exports to Europe are completely eliminated.

  Even so, key regional apparel producers such as Cambodia and Myanmar are alarmed that if the trade pacts proceed as planned, Vietnam could undercut their vital garment industries. Myanmar garment makers look to Europe as both a market and a source of investment, with garments a key part of the country’s plans to become a manufacturing economy.

  FashionatingWorld

  18/02/2016

  Quote from: “http://www.fashionatingworld.com/new1-2/item/4916-vietnam%E2%80%99s-progress-with-tpp-alarms-rivals.html“

• The question is not whether Vietnam will benefit from the TPP – encompassing 40% of the global economy – but how to maximise its benefits.

  Once approved by all member countries – the United States, Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam – the TPP will create a Pacific economic bloc with fewer barriers hindering the flow of goods and services. “The recently concluded TPP will not only improve market access, but will also serve as a critical anchor for the next phase of structural reform in Vietnam”, said Sandeep Mahajan, lead economist of the World Bank in Vietnam. “The Vietnamese economy is estimated to grow by an additional 8%-10% at least until 2030”.

  Tariff reductions and liberalised service sectors will mean cheaper imports of goods, services and factors of production. That means labour-intensive manufacturing sectors facing high import tariffs will benefit the most, including textiles, apparel and footwear, along with food processing and electronic industries.

  Among the current TPP signatories, Vietnam has unique comparative advantages, particularly in labour-intensive manufacturing. By enhancing access in key export markets, the TPP is expected to create opportunities for Vietnamese manufactured exports to replace Chinese exports in some places – notably the major markets of the United States and Japan. This trend began before the conclusion of the TPP negotiations, and the new agreement is expected to further enhance the manufacturing sector.

  TPP Impacts on Key Economic Impacts

   

  The TPP also is expected to considerably increase foreign direct investments to build up export capacity, including in upstream suppliers to sectors subject to strict rules of origin such as the textile and garment industry.

  At the same time, the implementation of the TPP will present several challenges for Vietnam. The country’s primary export sectors, including agriculture, could be at risk amid structural transformations that reallocate resources to manufacturing. Reforms to modernise and commercialise the agriculture sector will have to be accelerated to cope with this risk.

  According to Nguyen Thi Thu Trang, Director of WTO unit of VCCI, “for all sectors, especially those that are poised to be negatively impacted by the TPP, such as animal husbandry and agriculture, efforts should be made to identify key bottlenecks to the sectors’ development, so that remedies can be proposed for implementation. Their competitiveness should be gradually improved to take full advantage of new market conditions. The government is the key negotiator, and fully and comprehensively understands all of the commitments under the TPP. As such, it is the most suitable agency to provide guidance on the commitments to enterprises”.

  Real Exports Change, by sector, 2020-35

  The agreement also requires countries to adopt stricter rules. In Vietnam, this means changes affecting a broad spectrum of issues related to governance and the business environment, including regulatory quality, intellectual property rights, investor protection, competition, state-owned enterprise management, labour and environmental standards, food safety, public procurement, and liberalisation of services, including financial and telecommunications services.

  Finally, the TPP’s strict rules of origin could be a hurdle for Vietnam, where exports are highly dependent on imported materials and intermediate goods. Vietnam currently imports between 60 and 90 percent of textiles from other countries. The majority of these imports come from China and Taiwan, non-TPP countries, which means non-compliance with TPP rules of origin requirements.

  The required restructuring to maximize TPP benefits poses a short-term challenge for Vietnam, but will also likely boost foreign direct investment in upstream businesses and build production capacity. As evidenced, a number of Japanese, Chinese and South Korean firms are already investing heavily in fibre production in Vietnam.

  Additionally, information and guidance on taking advantage of the TPP should be provided to businesses as soon as possible, making them well prepared for economic integration. “Information should be provided to all sectors and areas of business, with close coordination of the VCCI, business associations and government agencies. In the business community, the VCCI is actively working on this plan and we expect further guidance from the Government and cooperation from ministries and agencies”, said Vu Tien Loc, Chairman of Vietnam’s Chamber of Commerce and Industry.

  “The TPP is considered a model for regional cooperation in the 21st century. The agreement includes 30 chapters, touching on not only traditional areas such as commodities, services, and investment, but also on new areas such as e-commerce, supply chains, and state owned enterprises, among others. The agreement is expected to boost the economic development of all TPP members, generate jobs, reduce poverty, improve living standards, and promote innovation, labour productivity and competitiveness, transparency and good governance, as well as enhance labour and environmental standards. Source: Ministry of Industry and Trade”

  For Vietnam to position itself to fully benefit from the TPP when implemented, complementary reforms are necessary to improve competitiveness and strengthen the capacity of the production sector to meet TPP standards.

  As noted by Sherry Boger, Chairwoman of Amcham, “The TPP is still a promise, not yet a reality. It is a framework for action, and should be a focus in 2016”.

  Implementing such changes will be demanding for Vietnam on its gradual path of reform, impacting the sectors of large state-owned enterprises and other institutional legacies of the past 40 years.

  “Vietnam has taken important steps recently to improve and enhance the market institutions that underpin a successful and sustainable economy”, stated David W. Carter, AusCham Director at the Annual Vietnam Business Forum 2015. “Nevertheless, as Vietnam integrates deeper into the global economy, particularly following the conclusion of the Trans-Pacific Partnership and other free trade agreements, it is imperative that Vietnam take bold steps to continue improving market institutions and economic freedom”.

  The determination to implement reforms and TPP commitments will bring Vietnam to a new level of economic development, creating a firmer foundation for the country to progress toward the goal of becoming a modern, industrialised upper middle-income country.  

  Vietnamnet

  19/02/2016

  Quote from: “http://wtocenter.vn/tpp/impacts-tpp-vietnamopportunities-and-challenges“

• Under the Trans Pacific Partnership, Vietnamese companies won’t have to pay tax when exporting products to the US. Vietnamese textile and garment products now have an import tariff of 17 per cent on an average when entering the US market. However, there is a feeling that it is not Vietnamese enterprises, but US importers which will get benefits, because US importers have to pay the tax.

  The question being raised is whether US importers would pay more for the products of Vietnamese exporters and if so whether they would share benefits to be brought by TPP with Vietnamese enterprises. The opinion is that US importers will take full advantage of TPP to optimise their profits. However, in an indirect way, there will be benefits to Vietnamese enterprises, because US importers would get higher profits thanks to TPP, and therefore, would place bigger orders with Vietnamese enterprises.

  Once demand increases, and Vietnamese supply is limited, US importers will have to offer higher prices to scramble for contracts with Vietnamese enterprises. Meanwhile, it has been estimated that 70 per cent of Vietnam’s textile and garment export turnover is from foreign invested enterprises. Vietnam exported $23 billion worth of textile and garment products in 2015, while only $7 billion went to Vietnamese enterprises’ pockets.

  FashionnatingWorld

  16/02/2016

  Quote from: “http://www.fashionatingworld.com/new1-2/item/4895-tpp-may-give-vietnam-tax-benefits.html“