Global manufacturers feel Vietnam is a good place to do business. Cambodia faces labor strikes, Thailand suffers endless protests, Myanmar needs infrastructure upgrade. Vietnam enjoys the advantages of political stability and low costs. It is becoming an important hub for American and European brands. The Trans-Pacific Partnership helps, too. As one of 12 countries negotiating a trade pact, Vietnam stands to benefit most from a clause that would cut tariffs on textiles and apparel, which are among the nation’s top exports. To take advantage of the tax reduction, foreign companies are shifting their factories to Vietnam. And after the shift some of these companies have seen a massive increase in their annual turnover.
The growth is reflected across the country. Textile exports increased 20 per cent in the first quarter of 2014, compared with the same period last year. The upbeat mood was evident at Saigon Tex, a garment and textile expo, April 10 to 13, 2014.
However, there are some weaknesses. Vietnam doesn’t produce enough fabrics and has to buy most of its materials from other countries. There’s an urgent need for technological innovation, improvement of quality control, labor management, environmental management, as well as improvement in the textile and garment supply chain in accordance with international standards. If it doesn’t develop more local suppliers, Vietnam won’t be able to tap the full potential of the Trans-Pacific Partnership.
