A seminar entitled “Trans-Pacific Partnership (TPP) Agreement - Its Impact on Vietnamese Textiles and Garments Enterprises” recently took place in Da Nang.  The event was co-organised by the Viet Nam Textile and Apparel Association (VITAS) and the municipal People’s Committee.

The signing of the TPP is expected to bring many benefits to Vietnamese enterprises.  In particular, 90% of the tariffs between TPP’s member nations will be exempt.  This will be an excellent opportunity for Viet Nam’s textiles and garments industry to expand into TPP’s member markets, especially the USA.  Currently, Viet Nam is the 5^th largest textiles and garments exporter in the world.

Workers at the 29 March Textiles and Garments Company

According to the TPP regulations, domestic enterprises will enjoy tariff exemptions for the first 3 years after the TPP agreement is signed and comes into effect.  To continue to enjoy the preferential interest rates after that, the TPP member countries will have to ensure that the full range of processes from spinning to dyeing and weaving are carried out within their countries.

At present, there are only a few fabric dyeing facilities in Viet Nam because this type of facility is not welcomed in about 100 industrial parks nationwide due to its environmental pollution potential.  Therefore, Viet Nam’s textiles and garments industry is now facing a shortage of technology and equipment.  Also, the majority of the raw materials used by the industry are imported from other countries.

In an attempt to deal with this problem, top priority has to be given to planning and developing cotton growing areas, as well as to creating favourable conditions for the operation of dyeing facilities nationwide.

Da Nang’s textile companies, including the Hoa Tho and 29 March Textiles and Garments companies and the Kad Industrial SA Viet Nam, would like the central government to take strong measures to prevent FDI and private enterprises from importing outdated equipment and technologies into Viet Nam.  This could create an unfair competitive environment and disturb the domestic labour market.  The focus should be on promoting the development of the domestic yarn and dye sectors as per the TPP requirements.