News / Asia

With an Eye on TPP, Garment Companies Flock to Vietnam

Exhibitors examine their company's yarn display at Saigon Tex, a garment and textile expo.
Exhibitors examine their company's yarn display at Saigon Tex, a garment and textile expo.
As China and its workers get wealthier, global manufacturers are looking south for less expensive places to do business. But Cambodia faces labor strikes. The Thai government suffers endless protests. Burma, also known as Myanmar, needs infrastructure updates. As a result, many companies are setting their sights on Vietnam.

Hundreds of them, in fact, descended on Ho Chi Minh City this weekend for Saigon Tex, a garment and textile expo. Sharing a border with China, Vietnam boasts geographic convenience, as well as political stability and low costs. Those attract companies like Spain-based Jeanologia, which showed off its laser-on-denim technology at the expo.

“It is becoming such an important hub for American and European brands,” Jeanologia area manager Borja Trenor Casanova said of Vietnam.

The Trans-Pacific Partnership (TPP) helps, too. As one of 12 countries negotiating the trade pact, Vietnam stands to benefit most from a clause that would cut tariffs on textiles and apparel, which are among the nation’s top exports.

To take advantage of the tax reduction, foreign companies are shifting their factories to Vietnam. Nguyen Thi Cam Tu is general manager at Thach Anh Vang, which represents manufacturers from Germany, Turkey, the United States, and others. She said the TPP is part of the reason her company saw a 50 percent increase in annual turnover in 2013,

“I see a lot of investment going on, because we see quite a lot of inquiries recently,” Cam Tu said, as a giant yarn spinner roared at the vendor slot next to hers at the expo.

The growth is reflected across the country. Textile exports increased 20 percent in the first quarter of 2014, compared with the same period last year, according to the General Statistics Office.

While production and revenues have risen steadily, Vietnamese companies and officials recognize a gaping weakness in the garment industry: It buys most of its materials from other countries. The Vice Minister of Industry and Trade Ho Thi Kim Thoa told an audience at the expo that Vietnam must set targets to produce more fabrics on its own.

“These targets demonstrate an urgent need for technological innovation, improvement of quality control, labor management, environmental management, as well as improvement in the textile and garment supply chain in accordance with international standards,” Kim Thoa said.

If it doesn’t develop more local suppliers, Vietnam won’t be able to tap the full potential of the Trans-Pacific Partnership. The agreement is likely to include a yarn-forward rule, which requires Vietnam to make clothes with materials from TPP member countries in order to receive tax-free import benefits.

But people are looking to improve the garment sector in other ways, too. Casanova said Jeanologia’s laser-printing is one of the technologies that could help Vietnam become a value-adding step in the production chain. The country, which achieved lower middle income status in 2010, is still very dependent on cheap labor. But to avoid the middle-income trap, it needs to find ways to add value to its exports. Casanova said it seems to want technology for that purpose, as well as to promote environmental sustainability in business.

 “Vietnam is showing interest in a change in the industry,” he said.

You May Like

Video Miami Cubans Divided on New US Policy

While older, more conservative Cuban Americans have promoted anti-Castro political movement for years, younger generations say economically, it is time for change More

2014 Sees Dramatic Uptick in Boko Haram Abductions

Militants suspected in latest mass kidnapping of over 100 people in Gumsuri, Nigeria on Sunday More

Video Cuba Deal Is Major Victory for Pope

Role of Francis hailed throughout US, Latin America - though some Cuban-American Catholics have mixed feelings More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Sudan School Becomes Target of Aerial Attacksi
X
December 19, 2014 12:45 AM
The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video Sudan School Becomes Target of Aerial Attacks

The school dropout rate is at an all-time high in Sudan's South Kordofan state because many schools have been destroyed during the three-year civil war between the government and SPLA-N rebel forces. Adam Bailes visited Sudan's Nuba Mountains' region and reports many children are simply too scared to go to school
Video

Video VOA Reporter Tours Devastated Peshawar School

Islamist militants wearing military uniforms and strapped with explosives attacked a military run school Tuesday in the northwestern Pakistani city of Peshawar. At least 141 people were killed in the horrific attack, most of them young students. VOA reporter Ayaz Gul visited the devastated school and attended the funeral of the principal who courageously tried to save her students from the deadly attack.
Video

Video Nigerians Fleeing Boko Haram Languish in Camp Near Capital

In its five-year effort to impose Islamic law in northeastern Nigeria, the Boko Haram extremist group has killed thousands of people and forced hundreds of thousands to flee. Some of those who ran for their lives now live in squalor on the edges of the capital, Abuja. Chris Stein reports for VOA.
Video

Video Putin Says Russian Economy Will Emerge Stronger

Russian President Vladimir Putin has said his country's sinking economy will not only recover but also become stronger, despite falling oil prices and Western sanctions over Ukraine. VOA's Daniel Schearf reports.
Video

Video Detained Turkish Journalists Follow Teachings of US-Based Preacher

The Turkish government’s jailing of critical journalists has sparked international condemnation and is being seen as an effort to undermine the followers of an ailing Turkish preacher based in the United States. VOA religion reporter Jerome Socolovsky has more.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.

All About America

AppleAndroid