return icon

Rules of origin trip up garment and textile opportunities from EVFTA

Garment and textile firms are aware of the opportunities to expand their export markets arising from the EU-Vietnam Free Trade Agreement (EVFTA) but are facing difficulties in complying with the rules of origin.

rules of origin trip up garment and textile opportunities from evfta hinh 0

Many garment and textile producers are daunted by the EVFTA rules of origin



The benefits of EVFTAcan best be seen in the garment and textile sector, with enterprises expected to enjoy plenty of room to expand into new markets due to the regulations setting out tax reductions.

According to the Ministry of Planning and Investment, Vietnam's textile and garment export turnover to the EU will increase by 81 per cent.

Most notably, in the context of unpredictable global developments such as trade protectionism, trade tensions, and the ongoing impact of the novel coronavirus, the trade deal could help local garment and textile firms boost their exports, persify markets, and achieve higher added value through the establishment of fresh supply chains.

The EVFTA opens opportunities for businesses with material autonomy as well as those with large EU groups of customers, such as TNG Investment and Trading JSC (TNG) and Thanh Cong Textile Garment-Investment-Trading JSC (TCM).

The EU is the largest market of TNG, accounting for 54 per cent of sales, while it makes up 40 per cent of GMC's total revenue. For TCM, the EU currently contributes only about 5 per cent of sewing revenue, however, with 60-70 per cent material autonomy, TCM is expected to meet EVFTA rules of origin.

Despite the EU being considered a promising market, in order to qualify for tariff exemption under the EVFTA, companies will need to increase the localisation rate of fabric because the EVFTA rules of origin (which are applicable from the fabric stage forward) are considered the largest barriers for garment and textile producers.

Along with Vietnamese fabrics, those imported from South Korea for export manufacturing are recognised to meet the EVFTA fabric-forward rules of origin and enjoy zero tariffs. Meanwhile, 60 per cent of imported fabrics come from mainland China and Taiwan at a far lower cost than fabrics imported from South Korea.

Thus, a number of garment and textile producers are sceptical of opportunities from this market. One of them is Song Hong Garment JSC, the representative of which said that the company cannot meet this requirement, and so will not be able to tap into the benefits of the free trade agreement. Additionally, the company does not expect to suffer an impact from this decision because its priority market has been the US for years now.

Other garment and textile producers also expressed intentions to focus on their traditional markets due to the low cost of materials from China. Even when the delays in supply from China due to COVID-19 pushed them to look for raw material imports from other markets such as South Korea, India, Bangladesh, and Brazil, many saw this as nothing more than a temporary solution.

Pham Xuan Hong, chairman of the Ho Chi Minh City Textile Association, said China simply cannot be replaced as the main supplier due to its much lower costs, while Truong Van Cam, vice chairman and general secretary of the Vietnam Textile and Apparel Association (Vitas), said that a significant portion of the textile industry's feedstock is from China. VOV

Vietnam’s garment-textile expects boom in 2020

Vietnam’s garment-textile expects boom in 2020

Vietnam’s garment-textile sector is expected to make breakthroughs in 2020 thanks to the Fourth Industrial Revolution.

Material autonomy key for Vietnam to fully exploiting EVFTA

Material autonomy key for Vietnam to fully exploiting EVFTA

Textile stocks have been on an temporary upswing thanks to the recent ratification of the EVFTA but textile enterprises still face difficulties due to heavy dependence on imported raw materials and reduced demand worldwide.  


Sli singing - the soul of Nung ethnic minority people

Sli is a unique folk singing style of the Nung ethnic minority people in Vietnam’s northern region, which is performed as a call and response between young men and women.

Vietnam spends US$9 billion importing oil, petrol products in 2022

South Korea was the largest petroleum supplier of Vietnam, with 3.22 million tons, up 96% year on year.

Vietnam named among top food destinations by Gordon Ramsay

Vietnam's rich cuisine has made it a favorite culinary destination not only for Michelin-starred chef Gordon Ramsay but also for food lovers worldwide.

Hang Sao- a unique cave pagoda in Yen Bai

Hang Sao is one of the beautiful and sacred pagodas in Yen Bai, believed to be discovered in the reign of the sixth Hung King.

Vietnam has great opportunity to be a global production base

Vietnam is becoming a destination for global manufacturers, an opportunity that needs to be taken full advantage of.

Lai Chau ginseng: a hidden national treasure

Ethnic people in Lai Chau province have long used locally-grown ginseng to improve their health.

Late artist Nguyen Tu Nghiem’s works on display in rare exhibition

This rare opportunity for art lovers to see the artist’s works is being held to honour his career, which spanned over 70 years in the 20th and 21st centuries.

Authorities to boost implementation of OV-related tasks: official

Efforts will be accelerated in 2023 to implement tasks relevant to overseas Vietnamese (OV) affairs, said Deputy Foreign Minister and Chairman of the State Committee for OV Affairs Pham Quang Hieu.

Censorship council under pressure when approving films related to private life

Director of the Cinema Department Vi Kien Thanh said the censorship council bears increasing responsibility, especially when censoring films related to private lives.

Young VN talent awarded 2023 Clay Research Fellowships

Pham Tuan Huy, 27, has become only the second Vietnamese talent to receive an award from the Clay Mathematics Institute (CMI) which gives out various prizes and sponsorships to promising mathematicians from around the world.

AFC praises Park Hang-seo’s “lasting legacy” in Vietnamese football

The Asian Football Confederation (AFC) has published an article titled “Park Hang-seo: A lasting legacy”, to honour the Korean coach after his magical five year journey with the Vietnamese men’s football team.

Discovering pig slaughtering festival in Vietnam

A traditional pig slaughtering festival got underway in Nem Thuong village of Bac Ninh city, northern Vietnam, on January 27 as part of activities to celebrate the new-year period.

Prague Airport wants to open direct air routes to Vietnam

Prague Airport in the Czech Republic is planning to launch new direct air routes to North America and Asia, including Chicago (US) and Vietnam.

Mural village woos more visitors to Quang Binh

The coastal village of Canh Duong in Quang Trach district, central Quang Binh province, is known for its breathtaking natural scenery. But now, the 400-year-old village attracts visitors with its beautiful and unique murals.

Intertwined opportunities, challenges for Vietnam’s economy in 2023

With certain headwinds predicted for the global economy in 2023, Vietnam too, faces considerable challenges. But opportunities are also significant if concerted and appropriate solutions are taken, an expert has said.