Advantage
Content
C. ANALYSIS
I. Advantages
a. TTP's positive effect on the clothing industry:
Viet Nam is known as the second biggest exporter of clothing to the U.S. Indeed, the garment
products imported from Viet Nam made up 15% of the summation of U.S. imports of women's
blouses, shirts, and suits.
Figure 1. U.S. Apparel Imports
In Billions of U.S. Dollars, by Selected Countries
Source: U.S. Office of Textiles and Apparel (OTEXA)
In addition, garment is considered as Vietnam's second greatest exported consumer goods
increasing by nearly 3 billion dollars within one year from 2012 to 2013 ( up from 15.09 billion
dollars in 2012 to 17.95 billion dollars in 2013). (Figure 2). Therefore, under the potential TPP
agreement, it can be predicted that the Vietnamese garment exported to the U.S. is likely to be
doubled. Although currently Viet Nam imports regionally either form China or other Asian
nations, TPP agreement can provide Viet Nam garment industry with the opportunity to increase
the incentive to purchase more U.S. textile over Chinese textile with the intention of duty-free
access to the U.S. market.
Figure 2. Top 10 major exported commodities of Vietnam
In Billions of U.S. Dollars
Source: Vietnam Customs
Figure 3. Vietnam’s textile and garment export structure by market in first 6 months of
2013
Source: General Department of Vietnam Customs
b. The benefits for Vietnamese garment and textile industry coming from TTP agreement:
While negotiating the TPP agreement, the most expected benefit for Viet Nam is that the
partners, especially U.S., will eliminate the taxes on Vietnamese goods exported into TTP's
markets. In the case of successful negotiation, more than 1,000 lines of Vietnamese garment
product currently exported into U.S market will be objected to the low tax rates or imposed 0%
of tax rate.
As established in Table 1, U.S. tariff on Vietnamese imported products is differ by product.
Relying on the language of the agreement, TPP can potentially eliminate these impost for
Vietnamese imports.
Table 1. Vietnam: Tariffs (percent ad valorem) for Textiles. Apparel, Footwear and Travel
Goods
Source: U.S. Office of Textiles and Apparel (OTEXA)
The basic original proposal coming from U.S. side for the TPP agreement determining the origin
of textiles to obtain tariff preferences is similar to those mentioned in the FTA between U.S. and
Peru. Rules of origin in the United States and Peru FTA are summarized as follows:
1. Yarn:
The fibers are considered "origin" in the following cases:
- The finished yarn products produced in the TPP countries, which must be made from cotton,
synthetic fibers, filaments intra-produced in TPP.
- Cotton yarn produced intra-TPP must be made from cotton, fiber or filament produced intraTPP.
- Artificial filament yarn is made in intra-TPP, and in the case of being blended with cotton or
synthetic fibers, the producers must use cotton or synthetic fibers are produced in intra-TPP.
The yarns are manufactured in intra TPP using other raw materials are allowed to use these "nonorigin" materials .
2. Cloth:
Cloth is determined the origin by determining the origin of fiber, except the following exceptions
:
- Woven fabrics can be made from non-origin yarns such as silk or waste silk, filament viscose
rayon, or yarn from fiber plants (but from cotton). TPP producers are not allowed to use nonorigin artificial staple fibers.
-The special woven fabrics including ring-floating woven fabrics and chenille fabrics, terry
fabrics and woven fabrics which is similar to terry, exclusion such woven fabrics for production
of non-origin wool.
- Knitted fabrics can be produced by non-origin yarns such as silk or waste silk, filament viscose
rayon, pull yarn from fiber plants (but from cotton); TPP producers are not allowed to use cotton,
man-made staple fibers which are considered as non-origin materials.
Non-woven fabrics can be manufactured using non-origin yarns as follows: filament viscose
rayon, and TPP manufacturers also are not allowed to use man-made non-origin staple fibers.
3. Carpets and other textile floor coverings:
Carpets and other textile floor coverings are treated by determining the origin of fiber, except the
following exceptions:
- Producers can use silk yarn, filament viscose rayon, the fibers from non-origin fiber plants
(except cotton)
4. Clothing and accessories:
Clothing and accessories are treated in the way following the application to determine the origin
of fiber, except some cases:
- Applying the rule of origin from tailoring for clothing products made from fabrics which are
produced from silk, linen, filament viscose rayon filament.
- In the case of some product lines such as coats, jackets, waistcoats, suits and slacks uniform,
clothing, fabrics lining visible used must be made from cloth bag yarns and finished in TPP.
- Suture materials made of cotton, synthetic filament yarn, staple fibers Synthetic fibers must be
produced in intra-TPP.
5. The finished textile products.
The origin of finished textiles products are determined via these of fiber, excepts some cases:
- Applying the rule of origin from tailoring for finishing textile products made from the fabrics
materials such as silk yarn, linen, filament viscose rayon.
In the line of luggage bag, TPP producers apply the rule using to determine the origin of fabrics
for woven fabrics from fibers, synthetic fibers, embedded fabrics, plastics or rubber coated. And
the rest of the fabrics are applied rules of origin calculated from tailoring.
We must know the way that the U.S. market treats the imported textile goods to have some
effective strategies and take use of the duty-free access following the principle that the tax
exemption may apply if the parties are able to prove that textile goods are under the following
groups such as woven fabric, crafted items from woven fabric as above, and traditional folklore
items.
c. The opportunities and the ways for Vietnamese garment firms to take advantage of TPP
agreement:
Participation in TPP will be a huge challenge for the textile industry in Vietnam when it is bound
by rules of origin intra-blocks because textile dyeing, so onward, complete canvas is still the
weakest stage in the supply chain of textiles Vietnam
The level of influence between specific rules of origin intra-blocks from the strand of us and
Vietnam textile & garment industry also depends on whether the Americans have embraced
easing or increasing computer activity of this rule by accepting the proposals in favor of Vietnam
textile & garment industry or not. However, certain aspects of the TPP will also create
tremendous motivation for the development of garment industry of Vietnam, especially the fiber
segment, textiles, dyeing
Opportunities for Vietnam
Vietnam is the third largest EXPORT to the U.s
The TPP members like Mexico and Peru currently have FTA with the US, backed the
rules of origin constrained to prevent competition from Malaysia and Vietnam.
The TPP could redirect the trade strongly because exports of Vietnam will replace a part
of the Chinese export ( America's largest import source)
Therefore, in order to get the advantage from the TPP, the Vietnam textile & garment industry
need to be reviewed, evaluated the status and capacity of production and exports to increase use
of domestic raw materials or imported raw materials of the TPP, as well as the investment
orientation suitable to the capacity in the future
Catching the opportunity.
Companies in Japan, China andSouth Korea are investing in fibreproduction in Vietnam
-
Texhong Textile holdings (Hong Kong) has inaugurated the first phase of the
plant fiber Wednesdaywith a $ 300 million INVESTMENTcapital in Quang Ninh
-
Company Kyungbang (Korean-owned) built a $ 40-million textilefactory shot in
Binh Duong
$ 1 billion of FDI into Vietnamtextile & garment industry in the project are
preparing TEL(Industry)
Vinatex invests in construction ofVINATEX Kien Giang garment factory(150 billion) at
the beginning of 2014
I. Advantages
a. TTP's positive effect on the clothing industry:
Viet Nam is known as the second biggest exporter of clothing to the U.S. Indeed, the garment
products imported from Viet Nam made up 15% of the summation of U.S. imports of women's
blouses, shirts, and suits.
Figure 1. U.S. Apparel Imports
In Billions of U.S. Dollars, by Selected Countries
Source: U.S. Office of Textiles and Apparel (OTEXA)
In addition, garment is considered as Vietnam's second greatest exported consumer goods
increasing by nearly 3 billion dollars within one year from 2012 to 2013 ( up from 15.09 billion
dollars in 2012 to 17.95 billion dollars in 2013). (Figure 2). Therefore, under the potential TPP
agreement, it can be predicted that the Vietnamese garment exported to the U.S. is likely to be
doubled. Although currently Viet Nam imports regionally either form China or other Asian
nations, TPP agreement can provide Viet Nam garment industry with the opportunity to increase
the incentive to purchase more U.S. textile over Chinese textile with the intention of duty-free
access to the U.S. market.
Figure 2. Top 10 major exported commodities of Vietnam
In Billions of U.S. Dollars
Source: Vietnam Customs
Figure 3. Vietnam’s textile and garment export structure by market in first 6 months of
2013
Source: General Department of Vietnam Customs
b. The benefits for Vietnamese garment and textile industry coming from TTP agreement:
While negotiating the TPP agreement, the most expected benefit for Viet Nam is that the
partners, especially U.S., will eliminate the taxes on Vietnamese goods exported into TTP's
markets. In the case of successful negotiation, more than 1,000 lines of Vietnamese garment
product currently exported into U.S market will be objected to the low tax rates or imposed 0%
of tax rate.
As established in Table 1, U.S. tariff on Vietnamese imported products is differ by product.
Relying on the language of the agreement, TPP can potentially eliminate these impost for
Vietnamese imports.
Table 1. Vietnam: Tariffs (percent ad valorem) for Textiles. Apparel, Footwear and Travel
Goods
Source: U.S. Office of Textiles and Apparel (OTEXA)
The basic original proposal coming from U.S. side for the TPP agreement determining the origin
of textiles to obtain tariff preferences is similar to those mentioned in the FTA between U.S. and
Peru. Rules of origin in the United States and Peru FTA are summarized as follows:
1. Yarn:
The fibers are considered "origin" in the following cases:
- The finished yarn products produced in the TPP countries, which must be made from cotton,
synthetic fibers, filaments intra-produced in TPP.
- Cotton yarn produced intra-TPP must be made from cotton, fiber or filament produced intraTPP.
- Artificial filament yarn is made in intra-TPP, and in the case of being blended with cotton or
synthetic fibers, the producers must use cotton or synthetic fibers are produced in intra-TPP.
The yarns are manufactured in intra TPP using other raw materials are allowed to use these "nonorigin" materials .
2. Cloth:
Cloth is determined the origin by determining the origin of fiber, except the following exceptions
:
- Woven fabrics can be made from non-origin yarns such as silk or waste silk, filament viscose
rayon, or yarn from fiber plants (but from cotton). TPP producers are not allowed to use nonorigin artificial staple fibers.
-The special woven fabrics including ring-floating woven fabrics and chenille fabrics, terry
fabrics and woven fabrics which is similar to terry, exclusion such woven fabrics for production
of non-origin wool.
- Knitted fabrics can be produced by non-origin yarns such as silk or waste silk, filament viscose
rayon, pull yarn from fiber plants (but from cotton); TPP producers are not allowed to use cotton,
man-made staple fibers which are considered as non-origin materials.
Non-woven fabrics can be manufactured using non-origin yarns as follows: filament viscose
rayon, and TPP manufacturers also are not allowed to use man-made non-origin staple fibers.
3. Carpets and other textile floor coverings:
Carpets and other textile floor coverings are treated by determining the origin of fiber, except the
following exceptions:
- Producers can use silk yarn, filament viscose rayon, the fibers from non-origin fiber plants
(except cotton)
4. Clothing and accessories:
Clothing and accessories are treated in the way following the application to determine the origin
of fiber, except some cases:
- Applying the rule of origin from tailoring for clothing products made from fabrics which are
produced from silk, linen, filament viscose rayon filament.
- In the case of some product lines such as coats, jackets, waistcoats, suits and slacks uniform,
clothing, fabrics lining visible used must be made from cloth bag yarns and finished in TPP.
- Suture materials made of cotton, synthetic filament yarn, staple fibers Synthetic fibers must be
produced in intra-TPP.
5. The finished textile products.
The origin of finished textiles products are determined via these of fiber, excepts some cases:
- Applying the rule of origin from tailoring for finishing textile products made from the fabrics
materials such as silk yarn, linen, filament viscose rayon.
In the line of luggage bag, TPP producers apply the rule using to determine the origin of fabrics
for woven fabrics from fibers, synthetic fibers, embedded fabrics, plastics or rubber coated. And
the rest of the fabrics are applied rules of origin calculated from tailoring.
We must know the way that the U.S. market treats the imported textile goods to have some
effective strategies and take use of the duty-free access following the principle that the tax
exemption may apply if the parties are able to prove that textile goods are under the following
groups such as woven fabric, crafted items from woven fabric as above, and traditional folklore
items.
c. The opportunities and the ways for Vietnamese garment firms to take advantage of TPP
agreement:
Participation in TPP will be a huge challenge for the textile industry in Vietnam when it is bound
by rules of origin intra-blocks because textile dyeing, so onward, complete canvas is still the
weakest stage in the supply chain of textiles Vietnam
The level of influence between specific rules of origin intra-blocks from the strand of us and
Vietnam textile & garment industry also depends on whether the Americans have embraced
easing or increasing computer activity of this rule by accepting the proposals in favor of Vietnam
textile & garment industry or not. However, certain aspects of the TPP will also create
tremendous motivation for the development of garment industry of Vietnam, especially the fiber
segment, textiles, dyeing
Opportunities for Vietnam
Vietnam is the third largest EXPORT to the U.s
The TPP members like Mexico and Peru currently have FTA with the US, backed the
rules of origin constrained to prevent competition from Malaysia and Vietnam.
The TPP could redirect the trade strongly because exports of Vietnam will replace a part
of the Chinese export ( America's largest import source)
Therefore, in order to get the advantage from the TPP, the Vietnam textile & garment industry
need to be reviewed, evaluated the status and capacity of production and exports to increase use
of domestic raw materials or imported raw materials of the TPP, as well as the investment
orientation suitable to the capacity in the future
Catching the opportunity.
Companies in Japan, China andSouth Korea are investing in fibreproduction in Vietnam
-
Texhong Textile holdings (Hong Kong) has inaugurated the first phase of the
plant fiber Wednesdaywith a $ 300 million INVESTMENTcapital in Quang Ninh
-
Company Kyungbang (Korean-owned) built a $ 40-million textilefactory shot in
Binh Duong
$ 1 billion of FDI into Vietnamtextile & garment industry in the project are
preparing TEL(Industry)
Vinatex invests in construction ofVINATEX Kien Giang garment factory(150 billion) at
the beginning of 2014
