VITAS: Apparel firms can enjoy part of TPP tax incentives

Dang Phuong Dung told the Daily on the sidelines of a seminar on apparel technology in HCMC on September 9 that most of the materials imported by local apparel enterprises came from China.

“Therefore, when Vietnam joins the TPP, which provides a strict rule of origin, Vietnam’s apparel sector will not be able to enjoy all tax incentives in the TPP but getting around 30% of them would be an achievement,” Dung said.

The biggest problem of the apparel sector is the knitting and dyeing process, so most of fiber output is for export. The country exports over US$2 billion worth of fiber annually, accounting for 70% of the volume of domestically produced fiber.

Therefore, Dung said the knitting and dyeing sectors should be developed so that the fiber production can better serve domestic demand rather than export.

Speaking at the seminar, the VITAS vice chairwoman said local apparel enterprises entered global markets slower than their rivals from other countries and have since focused on low-cost labor and outsourcing contracts instead of investing in material development.

The local apparel sector expects exports will rise from US$24.5 billion last year to US$36-38 billion in 2020 and US$64-67 billion in 2030. The target for local content is 55% in 2015, 65% in 2020 and 80% in 2030.

The U.S. is still the biggest market for Vietnamese apparel. Last year, garment shipments to this market accounted for 48% of Vietnam’s total apparel export turnover of US$24.5 billion. Meanwhile, Europe made up 16%.

Experts said Vietnam should develop industrial parks and complexes for knitting and dyeing factories. However, many provinces have not welcome such plants as these facilities could cause environmental pollution.

At the conference co-held by the Ministry of Industry and Trade and the representative office of the Korea Institute of Industrial Technology on September 9, South Korean investors presented environmentally-friendly technologies for knitting and dyeing projects.