Vietnam export growth open to question

By: Leonie Barrie - 30 June 2010 17:38

The boss of Vietnam's textile and apparel association says the country's soaring exports to the United States could be hampered by rising production costs and labour shortages, as well as the fine details included in trade pacts currently under negotiation.

Le Quoc An, chairman of the Vietnam Textile and Apparel Association (Vitas) believes Vietnam's textile and garment exports could be held back if "yarn forward" rules of origin are included in the ASEAN-US Free Trade Area or the Trans-Pacific Partnership Agreement.

The yarn forward rules require the yarn and fabrics for qualifying apparel to come from the exporting country or the United States.

Writing in The Saigon Times today (30 June) he adds: "There is, of course, room for growth if the sector can make optimal use of the Generalized System of Preferences (GSP) in EU and the Economic Partnership Agreement (EPA) in Japan."

In the ten years to 2009, Vietnam's textile and garment exports to the US have increased 100-fold, while shipments to the EU have tripled, and those to Japan have doubled.

Looking ahead, Le Quoc An also sees internal improvements having a role to play, including productivity improvements and steps to raise product quality and design capabilities.

"Low added value is arguably the Achilles' heel of Vietnam's textile and garment industry, but it can be tackled," he said.

Export Growth An Open Question