IIP VIETNAM PROPOSED THE CONSTRUCTION OF SEPARATE INDUSTRIAL PARK FOR TEXTILE AND GARMENT INDUSTRY - A NEW ORIENTATION TO IMPROVE VIETNAM'S ECONOMY

 

Recently, Vietnam has signed a series of new-generation free trade agreements (FTA), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and most recently FTA. with the European Union (EVFTA).

Implementing these two agreements, Vietnam's garment and textile industry has a great opportunity to boost exports to the markets of CPTPP and EVFTA. Even the garment and textile industry is determined to benefit the most. For example, with EVFTA, after this agreement takes effect, 42% of the tariff types applied to textiles and garments export to the EU will be immediately reduced to 0%; the rest will be decreased to 0% in 5-7 years. Such tax rates are an opportunity for Vietnam to increase exportation of textile and garment goods to the EU market.

But it is challenging that both CPTPP and EVFTA have the very strict rules on origin for this product. With EVFTA, the principle applied is "from fabric onwards", also with CPTPP, even "from yarn onwards". If raw materials and fabrics are not manufactured from CPTPP, EVFTA member countries, there is no preferential tax rate. Meanwhile, Vietnam still heavily depends on raw materials from China.

 

In order to acquire preferential tax rates, Vietnam is forced to be proactive in input materials for textile and garment production. But the problem is in the fact that localities are not willing to welcome investment projects in their areas because of concerns about environmental pollution. Therefore, the missing material is still insufficient. And that also means that Vietnam is in difficulty to meet the rules of origin to enjoy preferential tax rates.

IIP VIETNAM PROPOSED THE ESTABLISHMENT OF SEPARATE INDUSTRIAL ZONES FOR TEXTILE AND GARMENT INDUSTRY

IIP VIETNAM with the mission of promoting investment has been and will be connecting with many investors in the world to invest in Vietnam, including big investors in the world in the field of textile and garment. However, the problem of environmental pollution is posed to be seen by all of us, a series of localities were afraid and not interested when IIP VIETNAM proposed the establishment of a specialized industrial zone for foreign investors to invest in Textile and Garment industry.

In reality, according to the information of IIP VIETNAM, in order to catch the market opportunity of CPTPP, especially at the time of this agreement, there is still the participation of the US, called the Trans-Pacific Partnership Agreement (TPP), many domestic and foreign investors have invested in constructing textile industrial zones and implementing large-scale projects in Vietnam.

A typical example is the Texhong Group (Hong Kong) who has implemented the Industrial Park and Fiber Plant Project in Hai Ha Industrial Park (Quang Ninh). In addition, there are a number of other major projects, such as Pacific Crystal Textile, invested in Nam Sach Industrial Park and Lai Vu Industrial Park (Hai Duong); Xindadong Textiles Dung and Fiber fabric factory project in Quang Ngai; or Eclat Fabric Vietnam in Ba Ria - Vung Tau ...

And officially, only Pho Noi Textile and Garment Industrial Park (Hung Yen province) was established in 2006 to focus on textile industry projects. In addition, the Prime Minister agreed on the policy of constructing an industrial park to support the textile and garment industry in Phong Dien Industrial Park (Thua Thien Hue).

In addition, although there is no overall plan for textile and garment industrial zone development, there are a number of industrial zones established to attract textile and garment industrial projects, such as Rang Dong Industrial Park and Bao Minh Industrial Park (Nam Dinh), Tam Thang Industrial Park (Quang Nam), Binh An Industrial Park (Binh Duong) ...

However, these are still spontaneously developed industrial zones. According to the Ministry of Planning and Investment, in order to ensure close proximity to the actual situation, it is necessary to identify the needs and have solutions to develop industrial projects supporting the textile and garment industry to a certain extent, avoiding of rampant, spontaneous development. Besides, these projects must have modern technology and ensure the environment.