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Vietnam Textile and Garment needs to solve the material problem to "catch the waves" of EVFTA

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Tran Cong
Vietnam Textile and Garment needs to solve the material problem to "catch the waves" of EVFTA

On August 1, the Vietnam - EU Free Trade Agreement (EVFTA) will officially take effect, this is considered a great opportunity for the Vietnam textile and garment industry. Because according to EVFTA's commitment, among the main export products of Vietnam to the EU, the EU textile and garment products will be eliminated tariffs with 77.3% of export turnover in 5 years, 22.7% The remaining tariff will also be eliminated by the EU after 7 years.

In addition to the advantage of tax rates, this Agreement also promises to bring Vietnamese textile and garment enterprises the opportunity to import high quality machinery, access to qualified raw materials in the EU ...

With great opportunities, many textile and garment enterprises are ready to "catch the wave" as soon as the agreement comes into effect to take advantage of tariff advantages. In which, many enterprises have invested methodically from factories, technology machines to meeting technical standards of importers.

Mr. Nguyen Huu Thanh, Director of Euro Connection Joint Stock Company (Eurolink - a unit specializing in the production of garment and footwear products), said that although there are still many difficulties due to the effects of the Covid-19 epidemic However, to stay ahead of the Agreement, the company has prepared a lot of knowledge and information, hoping to take advantage of opportunities from the EVFTA Agreement.

Currently, Eurolink is transforming a larger model, Mr. Thanh expected and expected that the investment of European businesses moving from China to Vietnam will create a new "breeze" to flourish. Future. The company has 7 projects to build new factories, when the EVFTA Agreement officially comes into effect, the two sides' enterprises will probably cooperate and invest in each other so that more orders and customers can be found. goods that the company is producing.


However, with the export scale of nearly 5 billion USD / year to the EU, how to make Vietnam's textile and garment satisfy the origin criterion “from fabric onwards” in EVFTA to get tax reduction is still a difficult problem.

Rules of origin from fabrics will make it difficult for Vietnamese textiles to benefit from this Agreement. Because in fact, the textile and garment industry is not active enough to source fabrics that are qualified for export to the EU; Buying fabrics in the country has to pay 10% VAT more expensive than imported fabrics, making the tariff reduction benefits not enough to offset selling prices and compete with other countries. Moreover, the cumulative principle in EVFTA allows Vietnamese enterprises to use fabrics from Korea or a third country that both sides have signed a free trade agreement such as Japan, ASEAN. Therefore, the high cost and the inadequate variety of raw materials is also a matter for businesses.

Mr. Nguyen Van Cam - Vice Chairman of the Vietnam Textile and Apparel Association, said rules of origin are the most difficult issue of Vietnam's textile and apparel in making use of EVFTA. In addition to the planning issue, this knot removal requires the drastic participation of the Government, the Ministry of Industry and Trade and the local authorities in receiving the textile and dyeing project.

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Before the proposal of the Vietnam Textile and Apparel Association, the Import and Export Department (the Ministry of Industry and Trade) said that the ministry would coordinate with related associations and units to soon complete the development strategy, serving as a basis for the industry's development. upstream, meeting rules of origin. In the immediate future, the Ministry will build its own system of self-certification of origin, propagate and select a number of businesses to put into the system, connecting with the EU to ensure the reputation of Vietnam ...

On the business side, what textile enterprises need to do is to invest in improving the value and quality of products and goods in order to strengthen competitiveness in the EU market. Enterprises need to meet the management standards and procedures prescribed by the EU, attach importance to social responsibility, transparency of information on labor, production environment, and especially ensure the rules of origin./.

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