According to the Vietnam Textile and Apparel Association (VITAS) Vietnam’s textile-garment industry still depends on heavily on imported materials, with domestic producers importing 86 percent of their fabrics.
As per the Ministry of Trade and Industry the country imported 3.3 million USD worth of fabrics in the first four months of 2017, up 6.75 percent compared to 2016, largely because Vietnamese-made fabrics are still below the standards of foreign markets. With China accounting for 52 percent of the imports the fabrics were mostly originated from Asian countries.
The tariffs on textile and garment products from Vietnam will be eliminated by EU only if the EU-Vietnam Free Trade Agreement comes into force, Though, the agreement will impose long transition phase of up to 7 years for textiles and garments as it is among products sensitive to EU producers.
The move main purpose is to cut inputs from suppliers in countries outside of the agreement.Furthermore, Vietnam will have to satisfy “double transformation” rules-of-origin in return for full-fledged tariff removal that requires weaving and sewing and all subsequent manufacturing stages to be carried out within Vietnam thus it will stop Vietnamese manufacturers from directlyprofiting from the deal.
