RCEP to create huge impetus for Vietnamese garment sector

Vietnam is joining negotiations for the Regional Comprehensive Economic Partnership (RCEP). The RCEP, if comes into force, will create huge impetus for Vietnamese garment, textile sector as the country will not have to bear many trade barriers.

The RCEP covers 16 countries, including 10 members of the Association of the Southeast Asian Nations and their regional trading partners of China, Japan, South Korea, Australia, New Zealand and India.

According to Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), RCEP is expected to bring in numerous benefits to the country’s garment, textile sector in terms of cost, market scale, and material supply.

When participating in the RCEP, Vietnam will have a strategic market in Asia with three major benefits. The first thing is lower transportation fees due to geographical proximity. Secondly, RCEP market will help Vietnamese firms with supply of raw materials. Thirdly, the cultural similarities among Asian countries will help the RCEP negotiation and signing processes take place faster, said Giang.

According to the VITAS chairman, so far, Vietnamese firms have had orders till the end of August this year. Giang forecast that the garment, textile exports would experience a growth of 13-14 percent in 2017, compared to 9.2 percent in 2016.

As per Vietnam’s General Statistics Office, in the first quarter of 2017, Vietnam earned 5.6 billion U.S. dollars from garment, textile exports, up 10.2 percent year-on-year, while spending 2.3 billion U.S. dollars on fabric imports, up 5.5 percent.

Local companies urged to enhance management to ensure providing products with more competitive price, higher quality, and shorter delivery time as deeper the integration, the fiercer will be competition.