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

Lebanese Media Unite to Support Palestinians in Gaza

Joint newscast billed as Arab world’s first unified news bulletin in support of Hamas-controlled Gaza Strip More

Photogallery Australian PM Alleges ‘Coverup’ at MH17 Crash Site

Meanwhile, Russia's ambassador to Malaysia denies plane's black boxes were opened before they were handed over to Malaysian officials More

Despite Advances in AIDS Treatment, Stigma Lingers

Leading immunologist tells VOA that stigma is often what prevents those infected with disease from seeking treatment 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.
IAEA: Iran Turns its Enriched Uranium Into Less Harmful Formi
X
July 22, 2014 10:26 AM
Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video Relic of Saint Draws Catholics Worried About Immigration Issue

A Roman Catholic saint who is a figure of devotion for those crossing the border into the United States is attracting believers concerned about the plight of undocumented immigrants. Mike O'Sullivan reports from Los Angeles, where a relic of Saint Toribio has drawn thousands to local churches.
Video

Video Ukraine Rebels Surrender MH17 Black Boxes

After days of negotiations, a senior separatist leader handed over two black boxes from an airliner downed over eastern Ukraine to Malaysian experts early Tuesday. While on Monday, the U.N. Security Council unanimously demanded that armed groups controlling the crash site allow safe and unrestricted access to the wreckage.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.
Video

Video Nature of Space Exploration Enters New Age

Forty-five years ago this month, the first humans walked on the moon. It was during an era of the space race between the United States and the Soviet Union. World politics have changed since then and -- as Elizabeth Lee reports -- so has the nature of space exploration.
Video

Video Chicago’s Argonne Lab Developing Battery of the Future

In 2012, the U.S. Department of Energy’s Office of Science awarded a $120 million grant to a new technology center focused on battery development - headquartered at Argonne National Laboratory in suburban Chicago, Illinois. As VOA’s Kane Farabaugh reports, there scientists are making the next technological breakthroughs in energy storage.
Video

Video In NW Pakistan, Army Offensive Causes Massive Number of Displaced

Pakistan’s army offensive in North Waziristan has resulted in the large-scale displacement of the local population. VOA's Ayaz Gul reports from northwest Pakistan where authorities say around 80 percent of the estimated 1 million internally displaced persons [IDPs] have settled in Bannu district, while much of the remaining 20 percent are scattered in nearby cities.
Video

Video Kurdish Peshmerga Force Secures Kirkuk, Its Oil

The Kurdistan regional government has sent its Peshmerga troops into the adjacent province of Kirkuk to drive out insurgents, and to secure the area's rich oil fields. By doing this, the regional government has added a fourth province to the three it officially controls. The oil also provides revenue that could make an independent Kurdistan economically strong. VOA’s Jeffrey Young went out with the Peshmerga and filed this report.
Video

Video Malaysia Reeling: Second Air Disaster in Four Months

Malaysia is reeling from the second air disaster in four months involving the country’s flag carrier. Flight 340 vanished in March and despite an extensive search, no debris has been found. And on Thursday, Flight 17, likely hit by a surface-to-air missile, came apart over eastern Ukraine. The two incidents together have left more than 500 people dead. VOA Correspondent Steve Herman reports from Kuala Lumpur.

AppleAndroid