Hanoi(VNA) – Vietnam’s garment-textile sector is expected to expand its markets oncethe Vietnam-EU Free Trade Agreement (EVFTA) comes into force in early 2018, reducingtax on Vietnamese garments and textiles exported the EU to zero percent overthe next seven years. To make use ofopportunities offered by the pact, experts suggested local enterprises prepareto meet rules set by the deal, especially those regarding product origin. Europe is apromising market for Vietnamese garments and textiles with export turnoverreaching 3.5 billion USD in 2016, just behind the US. Truong Van Cam, VicePresident of the Vietnam Textile and Apparel Association (VITAS), describedrules of origin as the most important thing in the agreement. He said,Vietnamese garment-textile firms must ensure that their products originate fromVietnam or use materials imported from the EU or the bloc’s trade partners. The localgarment-textile industry is still heavily dependant on imported materials ,mostly from China, the Republic of Korea (RoK) and Taiwan (China), with thefabric sector, for example, importing up to 86 percent of materials forproduction and export. VITAS DeputySecretary General Vu Thi Phuong suggested domestic enterprises review theirinvestment and business strategies to catch up with the transformation from thecut-make-and-trim production model to free-on-board and original designmanufacturing (ODM) practices. According toPhuong, apart from strict rules, the agreement also offers an open mechanism tothe Vietnamese side, saying that products using materials from the EU’s partnercountries will also enjoy the tariff breaks. Under theagreement, fabrics from the RoK, which has a free trade agreement with the EU, areconsidered as having clear product origin and are eligible for the taxreduction. VITAS statisticsshow that the garment-textile sector spends more than 10 billion USD each yearon importing fabric, with more than half from China, about 18 percent from theRoK and 15 percent from Taiwan (China). If Vietnamesefirms continue to import materials from China, they will find it hard tobenefit from the EVFTA, the association said. European experts proposedlocal enterprises learn the rules and the roadmap for tariff reductions inorder to better access the market.-VNA
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The event has gathered over 400 exhibitors from 16 countries and territories, with more than 980 booths showcasing a wide range of products and technologies in automotive components, electronics, repair and maintenance, bodywork, accessories, and customisation.
Illustrative photo (Source: VNA) 
