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Government policies needed to boost Vietnam’s exports to CPTPP countries

"As per Vietnam Textile and Apparel Association, the country’s total textile and apparel (T&C) exports during the first four months of 2019 registered a 9.59 per cent growth to touch $11.43 billion. The US emerged as the largest importer accounting for 39.6 per cent of Vietnam’s export turnover. CPTPP members followed next with their imports accounting for 17 per cent of total Vietnam’s exports."

 

Government policies needed to boost Vietnams exports to CPTPPAs per Vietnam Textile and Apparel Association, the country’s total textile and apparel (T&C) exports during the first four months of 2019 registered a 9.59 per cent growth to touch $11.43 billion. The US emerged as the largest importer accounting for 39.6 per cent of Vietnam’s export turnover. CPTPP members followed next with their imports accounting for 17 per cent of total Vietnam’s exports. Imports by the European Union accounted for 13 per cent and those by Korea accounted for nearly 10 per cent.

Need for policy support to boost exports

Despite this robust performance, Vietnam’s T&C exports are mainly targeted towards traditional markets and are not promoted in CPTCPP member countries. In order to target these markets, manufacturers need to create new sources of raw materials besides improving their competitiveness.

As per HuuHieu, Executive Director, Vietnam Textile and Garment Group (Vinatex) the country’s T&A exports, even after four months of CPTPP taking effect, have not shown any signs of growth. CPTPP is currently valid in seven of the 11 member countries including: Japan, Singapore, Canada, Mexico, Australia, New Zealand and Vietnam.

Among CPTPP member countries, Canada and Australia are ideal markets for the Vietnamese textile and garment exports in the near future. The EU-Vietnam Free Trade Agreement (EVFTA), is also expected to increase Vietnam’s total export turnover to EU by around $16 billion.

Challenges to export growth

One of the challenges the Vietnamese T&A sector faces is high import of raw and auxiliary materials. To counter this, Vietnamese enterprises should prepare domestic and intra-regional materials to meet the local demand. In order to enjoy tax incentives from CPTPP, Vietnamese textile and apparel products need to be produced in Vietnam and other CPTPP countries only. Businesses should also pay attention to trade promotion and directly work with customers to avoid unnecessary intermediate costs. Moreover, enterprises should promote joint ventures and links to invest in chains. It is crucial to build centres to supply raw materials for textile and garment enterprises in all regions and areas.

As indicated by export results in recent times, without the preparation of the suitable equipment, the skill level of workers, management methods and initiatives in raw and auxiliary materials, opportunities from the CPTPP will turn into challenges. Businesses must therefore, meet the standards of foreign markets. State management agencies should also formulate policies to support enterprises and remove barriers in the process of administrative reforms.

 
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