Vietnam expects the Free Trade Agreement (FTA) and the Trans-Pacific Partnership (TPP) to be signed in 2015. Meanwhile Chinese, Hong Kong and Taiwanese investors have started increasing their investment in the garment and textile industry in Vietnam.
The Texhong group’s plant in Quang Ninh province will provide materials for markets in the southern region of China. The Hong Kong based TAL group has built a $40 million garment plant in Thai Binh province. It’s now working with Hai Duong province authorities on a 40 hectare fabric weaving and garment project.
When the FTA and TPP are signed, Vietnamese garment and textile products will enjoy zero per cent tax rate in the US and EU. The average tax rates are 17.5 per cent and 9.6 per cent in these two markets respectively. One of US’ conditions for the zero per cent tax rate is that fiber must be produced in Vietnam or other TPP countries. Most countries with TPP have not developed the fiber industry yet, forcing Vietnam to produce domestically.
The EU and Vietnam intend this agreement to be a modern, comprehensive and balanced agreement that supports the two sides' economies in meeting today's and future challenges and an essential building block in strengthening the relationship between Europe and South East Asia.