Vietnam'S Textile And Garment Industry Is Hard To Benefit From The Vietnam EU FTA Due To Its Dependence On Imported Fabrics

        Vietnam's investment Daily reported on October 23 that the latest report submitted by Vietnam's Ministry of industry and trade to the National Assembly shows that the annual export volume of the textile and garment industry is nearly 40 billion US dollars, and it needs 10 billion meters of cloth. However, the domestic fabric production capacity is only 2.3 billion meters, and the self-sufficiency rate is about 25%. Most of the fabrics are imported from China, Taiwan and South Korea, and the domestic garment processing industry only stays in the sewing link of the industrial chain, Because of its low added value, it is difficult to meet the origin standard stipulated in the Vietnam Europe free trade agreement, so it can not fully enjoy the benefits brought by the Vietnam Europe free trade agreement. As South Korea has signed a free trade agreement with the European Union, garment enterprises can only import fabrics from South Korea if they want to benefit from the trans European Free Trade Agreement. However, only 15.2% of fabrics are imported from South Korea, 54.9% from China and 12.1% from Taiwan.

The main reason affecting the domestic fabric production capacity is that the supporting industries such as cotton, yarn, dyeing and finishing can not keep up with the demand of garment processing, especially the restriction of environmental protection department on the development of dyeing and finishing industry, which seriously restricts the fabric production. At the same time, it needs huge investment to develop cloth production from the source. To solve the 8 billion meter cloth production gap, it needs to invest 30 billion US dollars, which is the bottleneck restricting the fabric production.