Vietnam may impose 2% duty on polyester fibre to avoid TTP disappointment
13/05/2015
The fibre is not currently subject to import duties, but Vietnam has concerns about its ability to take advantage of the market access benefits of the Trans-Pacific Partnership (TPP) because discussions so far indicate that duty-free apparel circulating among the signatories to the 12-country free trade agreement will have to be made from yarn produced by a TPP country. This is known as the ‘yarn forward’ rule.
At the moment, Vietnam does not produce enough yarns and fabrics domestically to make its apparel industry self-supporting. With the proposed import duty on polyester staple fibre, the government aims to encourage more Vietnamese textile companies to spin their own. Companies that have already made moves in this direction include Century Synthetic Fiber Corporation, Thanh Cong and the Vietnam Textile and Garment Corporation (Vinatex).
Formal negotiation rounds for TTP ended in June 2014, but many disagreements remain, according to reports, which is the reason for delay in the treaty’s implementation. The 12 countries preparing to sign up are Peru, Australia, Brunei, Canada, Singapore, Chile, Japan, Malaysia, Mexico, New Zealand, the US, and Vietnam.
China, from where many Vietnamese textile companies import raw materials at the moment, is not part of the deal.
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